Economic sectors: Understanding the diversity of the economy

Economic sectors are part of how an economy is organized and functions. From the production of raw materials to advanced services, these sectors form a complex structure that drives development and well-being in every country.

Economic sectors are divisions within the economy in Mexico that group productive and commercial activities according to the goods and services they offer. Depending on the stage of extraction and manufacturing, each sector has distinct regulations. Having these divisions allows us to analyze and understand how different parts of the economy interact, and they play a central role in tax collection, which helps measure the level of production and income generated in the country.
Mexico has a mixed economy, as do most democratic countries worldwide. There are three main classifications of economic sectors:

• Primary sector: Includes activities related to the extraction and obtaining of natural resources.

• Secondary sector: Involves the transformation of raw materials into manufactured products.

• Tertiary sector: Covers services, trade, and activities that do not directly involve production.

The importance of economic sectors in a country’s development

Mexico is rich in natural resources, allowing for various activities across economic sectors. These sectors are essential for the growth and stability of any country. Each adds value to the economic system and generates jobs, income, and goods.

• Job Creation: The primary, secondary, and tertiary sectors create millions of jobs across different skill levels.
• Attraction of Investments: A diversified economy with dynamic sectors tends to attract more domestic and international investments.
• Economic Balance: A balanced interaction between sectors prevents excessive dependence on a single type of economic activity, strengthening resilience in the face of crises.

Types of economic sectors

Primary sectors: The basis of production

The extraction of raw materials is the most prominent part of the primary sector, an economic sector that includes the use of agricultural, livestock, fishery, mining, and forestry resources, among others. These activities form the economy’s foundation, providing the raw materials necessary for other sectors. Therefore, countries’ economic and food security largely depend on this sector.

An example of the excellent results of the primary sector for the Mexican economy is the production of agro-food and fishery activities, which generated 300 million tons. Of these, 273.3 million tons came from agricultural activities, 24.7 million tons from livestock, and 2 million tons from the fishery sector.

Mexico is a privileged nation with 1,960,189 km² of land area and 3,149,920 km² of seas, which provide it with a privileged biodiversity and variety of climates. These range from ideal areas for growing cacti and tropical zones for producing citrus fruits to semi-arid areas where agave is cultivated, among other crops.

In the northern states of Mexico, livestock production produces high-quality meat and basic foodstuffs such as milk, eggs, and honey. In the southern part of the country, fishing is a viable practice thanks to extensive maritime regions that allow fishing without disturbing the natural cycles of aquatic ecosystems. Approximately 6.5 million people in Mexico are dedicated to various agriculture, livestock, and fishing activities.

Secondary Sectors: Industry and Its Impact

The secondary sector focuses on manufacturing and construction. Here, raw materials from the primary industry are transformed into finished products such as clothing, cars, and technology. This sector drives innovation and fosters competitiveness in the global market. Although this sector is key to development, it faces challenges related to sustainability and carbon emissions reduction.

Since 2021, the GDP from secondary activities in Mexico has shown sustained growth. In the first quarter of 2024, it exceeded 8 trillion Mexican pesos, nearing the historical high reached in the third quarter of the previous year. The main entities with the highest manufacturing production in Mexico are: Coahuila, Nuevo León, Jalisco, Guanajuato, and the State of Mexico.

Key characteristics of the secondary sector:

• Converts raw materials into manufactured goods.
• Relies on the primary sector for inputs and the tertiary sector for distribution.
• Focuses on industry.
• Depends on machinery for processes.
• Requires capital investment for production.

Tertiary sectors: Services that drive the economy

The tertiary sector includes activities such as trade, education, health, tourism, and financial services. This sector does not produce goods but adds value through the distribution and provision of essential services. Technology has transformed the tertiary sector, enabling more efficient and personalized services while connecting local economies with the international market. The tertiary sector is considered a driver of economic growth for Mexico.

Economic sectors in Monterrey

Among the main activities are: commerce (16.8%), real estate and rental services for movable and intangible goods (9.9%), construction (9.6%), and machinery and equipment manufacturing (8.5%). Together, they represent 44.8% of the state’s GDP. Major productive activities carried out in the state include commerce, construction, manufacturing, machinery and equipment manufacturing, transportation, communications, and real estate and rental services.

According to the Nuevo León government, the region’s economy consists mainly of:

• 35% Manufacturing
• 19% Commerce
• 14% Others
• 9% Transportation
• 6% Construction

The size of businesses is mostly micro, representing 88.8%, followed by small businesses at 8.2%, medium-sized businesses at 2.3%, and large businesses at 0.7%. The strategic sectors of the entity come from areas such as aerospace, automotive, biotechnology, appliances, specialized medical services, information technology, agribusiness, and more.

Formal and informal economy

Differences between the formal and informal economy

The formal economy includes all economic activities regulated and registered by the government, such as businesses and jobs that pay taxes. On the other hand, the informal economy comprises unregulated activities, such as street vendors or jobs without formal contracts.

• Formal economy: Guarantees job stability, access to social benefits, and contributes to the country’s fiscal development.
• Informal economy: Although it provides millions with employment, it lacks regulation, which can result in economic insecurity for workers.

Impact of the informal economy on economic sectors

The informal economy poses a challenge for economic sectors, as it reduces tax revenue and promotes unregulated practices that affect competitiveness. However, it also acts as a safety net for vulnerable populations, allowing them to generate income in times of economic crisis.

Investment opportunities in economic sectors

How to identify profitable sectors for investment

Investing in economic sectors requires analyzing global trends, market demands, and local opportunities. Key factors for identifying profitable sectors include:

• Projected growth: Technology, renewable energy, and logistics sectors show high growth potential.
• Available infrastructure: Having industrial parks and specific economic zones facilitates efficient operations.
• Government support: Tax incentives and public policies can make investing in specific sectors more attractive

Benefits of Investing in the Formal Economy

Investing in the formal economy offers multiple advantages:

• Legal security: Activities are protected by law, guaranteeing stability for investors.
• Access to financing: Formal businesses have easier access to credit and funding.
• Contribution to development: Helps strengthen the country’s economy by generating jobs and paying taxes.

The future of economic sectors

Invitation to explore opportunities with VYNMSA

The future of economic sectors is closely tied to innovation, sustainability, and diversification. In this context, industrial parks like those developed by VYNMSA are key for companies seeking to expand in a competitive and well-structured environment. With strategic locations in Monterrey, VYNMSA offers customizable industrial buildings that are ready to operate and designed to meet the needs of various sectors. These spaces promote operational efficiency, global connectivity, and sustainable business growth.

Exploring opportunities with VYNMSA means betting on a promising future, where quality infrastructure and professional support form the foundation for success. Grow your business with VYNMSA and be part of future economic development.