Tabasco, Campeche and Michoacán, in industrial contraction

Last March, 15 of Mexico's 32 states recorded annual declines in industrial activity, but three are notable for their negative growth for more than a year.

Tabasco, with its 18.8% annual decline in the third month of 2025, extended its streak of factory production declines to 17 months, according to data from the National Institute of Statistics and Geography (INEGI).

Michoacán and Campeche follow, with a 13-month consecutive downward trend, while the steepest decline was seen in Quintana Roo (41% annually).

“The cases of Tabasco, Michoacán, and Campeche exemplify different aspects of the current industrial slowdown in Mexico. Tabasco and Campeche share a common oil destiny: both grew under the influence of Pemex and are now suffering a simultaneous blow from the state-owned company's crisis, the decline in crude oil production, and the end of six-year projects,” notes economic and financial analyst Héctor Magaña.

"The result in both is economic contraction, loss of formal jobs, and a domino effect on local businesses and services. The lesson for these entities is the urgent need to diversify their production matrix beyond oil, strengthening other sectors to cushion the ups and downs of the energy industry," he adds.

Regarding Michoacán, the specialist explained that the state is experiencing a different kind of industrial crisis, marked by security and structural problems. "Its agribusiness, despite its export potential, is threatened by violence and a lack of conditions for growth."

Furthermore, he said, the high level of informality and low attractiveness for foreign investment indicate that the state requires profound improvements in its business climate, infrastructure, and rule of law to take off industrially.

“In all three states, the lack of robust private investment, whether due to mistrust, insecurity, or adverse policies, is a common thread that exacerbates the situation. They also share the need for public rescue and reconversion policies: support for struggling local companies (such as Pemex suppliers or small businesses in Michoacán), fiscal incentives for new productive projects, and regional development plans that reduce dependence on a single sector,” notes Héctor Magaña.

A matter of trust

Experts point out that the crisis is no longer just financial, but also a matter of trust: in Campeche and Tabasco, certainty in Pemex as a reliable engine has eroded, and in Michoacán, the population lacks confidence in the security to undertake business.

“Ultimately, 2025 is proving to be a difficult year for the industry in these states. Overcoming it will require both addressing the immediate causes (oil debt, insecurity, infrastructure) and addressing long-term issues: diversifying the economy, rebuilding confidence, and creating environments where the industrial sector can prosper sustainably,” the expert concludes.

In all three entities, the lack of robust private investment, whether due to distrust, insecurity or adverse policies, is a common thread that aggravates the situation.