Sectors of the Economy
Agriculture, Forestry, and Fishing: In 2007 agriculture accounted for only 4 percent of gross domestic product but employed 18 percent of the labor force. Agricultural practices range from traditional techniques, such as slash-and-burn cultivation of indigenous plants for family subsistence, to the use of advanced technology and marketing in large-scale, capital-intensive export agriculture. The staple food crops are maize, wheat, sorghum, barley, rice, beans, and potatoes. The principal cash crops are coffee, cotton, sugarcane, fruit, and vegetables. Other important agricultural goods include beef, poultry, dairy products, and wood products.
Agricultural exports, valued at US$7 billion in 2006, are destined primarily for the United States. Forestry production is geared toward the exploitation of domestic fuelwood, sawlogs for construction, and pulpwood for processing in domestic paper mills. Mexico's coastal fishing grounds offer a rich variety of fish and other seafood. The Pacific coast accounts for nearly three-quarters of Mexico's total catch, producing mainly lobster, shrimp, croaker, albacore, skipjack, and anchovies. Mexico's Gulf and Caribbean waters produce shrimp, jewfish, croaker, snapper, mackerel, snook, and mullet. In 2005 the total catch exceeded 1.4 million metric tons.
Non-fuel Mining and Minerals: Mexico has abundant mineral resources and is the world's second-largest producer of silver. During 2007 silver production was approximately 2.3 million metric tons. Other significant mining products in 2007 were iron (7.3 million metric tons), sulphur (1.0 million metric tons), fluorite (0.92 million tons), zinc (0.42 million metric tons), copper (0.32 million metric tons), and manganese (0.16 million metric tons). Mexico also possesses substantial deposits of mercury, bismuth, antimony, cadmium, phosphates, and uranium.
Industry and Manufacturing: Manufacturing is the economy's leading export sector, accounting for 81 percent of total export revenues in 2007 and about a quarter of gross domestic product. About a quarter of Mexico's labor force is engaged in some type of industrial or manufacturing activity. The manufacturing sector was transformed by the liberalizing reforms of the late 1980s and early 1990s, which privatized hundreds of state enterprises and greatly expanded opportunities for foreign direct and portfolio investment. Manufacturing attracts about half of all foreign direct investment in Mexico, two-thirds of which is concentrated in the maquiladora sector, comprising more than 2,000 businesses employing 1.13 million workers in 2004. Overall manufacturing output is dominated by three activities: machinery and equipment (primarily the automotive sector); food, beverages, and tobacco; and chemicals, petrochemicals, rubber, and plastics. Together, these three sectors account for three-quarters of manufacturing output. Other components of manufacturing output include textiles, clothing, and leather goods; metals; and paper products. Principal industrial centers are located in and around the Mexico City metropolitan area, Monterrey, and Guadalajara.
Services: Services (including financial services) make up the largest segment of the Mexican economy, accounting for 70 percent of gross domestic product (GDP) in 2007 and employing about 60 percent of the national workforce. In recent years, major transnational retailers have expanded their presence in the country. Merchandise counterfeiting and intellectual property rights crimes are pervasive within the informal retail sector, threatening the profitability of the formal retail sector. Tourism, which caters primarily to U.S. and Canadian travelers, accounts for about 1 percent of GDP.
Banking and Finance: Financial services represent the most advanced component of the services sector, accounting for about a quarter of all foreign investment. In 2006 more than 80 percent of banking sector assets were foreign-owned. Mexico has a central bank (Banco de México) and six types of banking institutions: public development banks, public credit institutions, private commercial banks, private investment banks, savings and loans associations, and mortgage banks. Other components of the financial system include securities market institutions, development trust funds, insurance companies, credit unions, factoring companies, mutual funds, and bonded warehouses. Since 1994, Banco de México has been largely autonomous. The bank is governed by a five-member board composed of a chairperson or "governor" and four "subdirectors." The governor serves a six-year term; subdirectors serve eight-year terms and are appointed on a staggered basis. All members are appointed by the president but once confirmed may not be removed except in cases of gross misconduct or incapacitation as outlined in the Central Bank Law.
Labor: In 2006 the labor force was estimated at 44.5 million (out of a total population of 107 million). Approximately 1 million new workers enter the labor force annually; however, the Mexican economy typically creates only about half as many new jobs. The Mexican labor market is characterized by the existence of an informal sector, in which workers are mostly unskilled, do not pay taxes, and do not receive benefits, and a formal sector, in which jobs generally require more skills, and working conditions and benefits are regulated by strict labor laws. The informal sector is estimated to make up between 40 and 65 percent of the total labor force. During 2007 Mexico reported a low unemployment rate of approximately 4 percent; however, real wages have stagnated during the past decade, and 25 percent of the workforce is believed to be underemployed. In 2007 the labor force was distributed by occupation as follows: services, about 60 percent; industry, about 25 percent; and agriculture, about 18 percent.
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