We forecast a high 2013-2018 CAGR of 13.4 % in US dollar terms, taking the medical device market to USD 6.9 bn. Mexico will remain the second largest market in Latin America. I mports remain high but represent half the value of exports, as the country operates intensive maquiladora activities directed to the USA, Mexico's leading trade and investment partner. Mexico has strengthened its regulatory environment in recent years, but its power in Latin America is restricted by Brazil.
Headline Industry Forecasts:
We forecast that the medical device market will achieve a 2013-2018 CAGR of 13.4% in US dollar terms and 11.5% in local terms. This will take the market from an estimated USD3.7bn in 2013 to USD6.9bn in 2018, putting Mexico within the top fastest growing markets in the world. Mexico will remain the second largest market in Latin America.
Mexico will remain the top medical device importer in Latin America in 2015, ahead of Brazil. We believe that import growth will remain high in US dollar terms in 2015, as a significantly stronger consumer offsets the negative impact of a weaker exchange rate. The USA will remain the leading supplier. In US dollar terms, imports grew by 9.7% in 2014, reaching USD3.7bn, while imports recorded a 2008-2013 CAGR of 6.9%.
Mexico will remain the leading medical device exporter in Latin America, ahead of Brazil. With over 90% of exports still shipped across the border to the USA, due to maquiladora activities, export performance will remain dependent on the USA. We believe that a more stable US economy and a stronger dollar are again encouraging strong export growth. In US dollar terms, exports grew by 11.3% to USD7.8bn in 2014, while exports registered a 2008-2013 CAGR of 6.4%.
For many, Mexico has become an extension of the USA. The country is manufacturing a demanding product mix, from defibrillators to diagnostic imaging equipment to traditional disposable medical devices.
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Overview Of The Medical Market In Mexico
Mexico has the second largest medical device market in the Latin American region, valued at US$4.0 billion in 2013. The market is dominated by medical device imports, principally from the USA. US manufacturers benefit from geographic proximity and preferential terms under NAFTA. Some of these imports, however, are used to produce goods which are eventually sent back to the USA. Mexico is the third largest medical device importer in the Americas region, behind the USA and Canada; Brazil is not a big importer in comparison, as it relies on local production.
Political stability, economic growth, high demographics, chronic disease incidence, increasing health expenditure and new technology acquisition, particularly of diagnostic imaging and orthopaedic & prosthetic products in the public sector, are factors contributing to the medical device market growth. However, the weakening value of the Mexican peso against the US dollar has limited market growth in US dollars. The improved economic outlook has boosted growth prospects in the 2013-18 period. Future growth will depend in part on growth within the US economy, which remains the country's main trade and
Exports of medical equipment and supplies were valued at US$6.4 billion in 2012, of which 91.1% was shipped across to the USA. The USA has been a favoured destination for Mexican exports and is still the chief destination for most medical devices, but President Obama has sought closer ties with Asia, in particular China. Some Mexican export sectors have been overtaken by China and maquiladora activity moved there, in spite of Mexico's geographical proximity and low operation costs. Mexico needs to develop its economy outside of the maquiladora programme for increased stability.
Strategic Market Analysis:
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