There is evidence of a growing skills mismatch in Mexico, as the long-term unemployment rate has risen.
While Mexico’s overall labour market score is unchanged, firms are expected to face pressure from rising wages this year.
Slower wage growth in high-skill occupations led to wage gaps narrowing. This reduces pressure on employers of highly skilled workers.
Managing Director, Hays Mexico
Investment continues to be constrained by high uncertainty around the outcome of ongoing North American Free Trade Agreement negotiations and the Government’s fiscal consolidation plan. Private consumption has supported growth, even though inflation eroded real wages in 2017. Turning our attention to the labour market; despite the rise of the long-term unemployment rate, there are still low rates of female participation and a growing skills mismatch. Market predictions are positive as job formalisation remains robust and the country has one of the youngest and hardest-working labour forces in the world. In order to achieve inclusive growth in productivity and competitiveness, Mexico will have to increase the investment in education to get a highly-prepared workforce, especially for the digital future.
Axel Dono, Managing Director, Hays Mexico
In 2017, the Mexican economy grew by 2.3%. This was slower than in the previous two years.
The unemployment rate has been falling steadily since its recent peak in the aftermath of the global financial crisis. In the first quarter of 2018, it stood at around 3.3%. However, this low headline figure masks some underlying weakness. For instance, while the youth unemployment rate stands well below that of the European Union, this is because significant numbers of young adults have become discouraged from looking for work. It is to be hoped these people will rejoin the workforce (employed and looking for employment), when the economy gathers pace.
Over the medium term, the Mexican population is forecast to grow by over 1% a year.