Economic Sectors of Mexico: Main Characteristics

The economic sectors of Mexico they are the different areas of the economy that this nation develops. Traditionally they are divided into primary, secondary and tertiary, according to the production phase in which the sector involved is located; within each sector the activities are grouped according to the similarity they hold among themselves.

In this way, the primary sector is related to the extraction of the raw material. For its part, the secondary sector is responsible for the processing of this raw material, and the tertiary sector is related to complementary activities or related to the previous sectors.

Mexico has a mixed economy; that is, it is composed of both private and state-owned companies; The government also regulates economic activity. Currently, the economy of this country is among the first 20 largest in the world.

In total, there are 72 branches that make up the economic sectors of Mexico. The primary sector is made up of 4 activities, the secondary sector includes 56 and the tertiary sector has 12 activities. Among the economic sectors that make up the Mexican economy, the one that affects the most is services: it contributes more than half of GDP.

Main characteristics of the economic sectors of Mexico

Primary sector

The primary sector is made up of agriculture, livestock, forestry (logging) and fishing. It is one of the vital economic sectors of Mexico, since it contributes to the development of the other two.

In the early 1980s, this country adopted an export-led growth model. As a result, the primary sector began to experience an improvement.

The growth of agricultural activity was the main source of foreign exchange that made it possible to respond to capital imports and met the growing domestic demand for goods.

Likewise, it provided the raw materials demanded by the industry that was being born, and provided abundant labor for the other productive sectors.

Important growth

On the other hand, during the period 2013-2017 the primary sector presented an increase of 12.4% of its GDP. Likewise, it has generated benefits for more than seven million women and men who work in this sector.

Thus, this sector has driven Mexican self-sufficiency in most fruits, vegetables, beans, rice and sugar. Its growth is still maintained, and it is approaching the same sufficiency in meat and dairy products.

Secondary sector

The secondary sector is one of the largest economic sectors in Mexico. It is integrated by mining and oil activities, and by the processing industry (manufacturing industry) of the raw material.

Mining and oil activities

The production of the mining industry represents 4% of its total GDP. This sector generates more than 352,000 jobs, according to economic data for 2017.

Approximately 80% of the Mexican mining industry deals with the extraction of precious metals and non-ferrous metals.

In addition, its mines produce 1.7% of the world's mineral production. In this sense, the Aztec country is the world's largest producer of silver.

According to World Mining Data (2015), Mexico is the 13th largest producer of mining products worldwide.

With regard to oil, the Mexican nation is one of the largest oil producers in the world. This statement is based on a production of 2.1 million barrels per day in 2016.

Similarly, it is the third largest in America after the United States and Canada. According to records, only in 2016 the United States imported more than 437 million barrels of heavy crude oil from Mexico.

Oil is a crucial component of the Aztec economy. The profits of the oil industry represent a high component of Mexican GDP. The statistical data for 2016 show that it contributed about 32% of total revenues.

Processing industry

This sector takes the production of the primary sector and manufactures finished products. These products can be destined for internal consumption or for export. Manufacturing can be divided into heavy industry and light industry.

According to IMF reports (2016), the nation would be ranked 15th in the list of industrialized countries.

From the eighties, historical data show that the contribution of manufacturing to the Mexican economy has experienced a steady decline. However, it has always remained above 30% of GDP.

Now, one of its most important industries is the automotive industry. Many of the leading car manufacturers have established their operations in their territories. These include General Motors, Ford, Chrysler, BMW, Toyota, Honda, Volkswagen and Mercedes Benz.

The Mexican automotive industry has also gradually become more advanced. In its beginnings it was only dedicated to the assembly of parts; then it became a center for research and development.

Third sector

The tertiary is one of the important economic sectors of Mexico. This sector has been increasing its performance since 2006. Therefore, for more than 10 years it has reported more than 60% of annual GDP for Mexico.

This sector includes tourism, commerce, communications, services and transport. At the same time, the tourist activity includes hotels and restaurants, and the service includes various professional, financial and governmental services.

In the same way, this broad sector includes commerce, transportation, communications, real estate activities and rental activities.

The figures from the Tecnológico de Monterrey Business School report an improvement in this sector's economic division in the first quarter of 2018. During this entire period, it contributed 1.8% of the 2.2% registered in the increase in Mexico's GDP.

On the other hand, the services sector is expected to be a driver of first-line economic growth. This hope is based on the fact that the scope of services occupies more than 50% of the Mexican workforce.

The production of information is included in the tertiary sector. However, some economists do not consider it as a service. As a result, it is being considered as another of Mexico's economic sectors: the Quaternary.

References

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