Hurricane Beryl brought roughly $4 million in losses for Mexican apparel makers as the storm swept though the country’s Yucatan Peninsula over the Fourth of July weekend, forcing factories to shut or scale down operations for three days, executives said.
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“The worst days were Friday and Saturday when there was very heavy wind and rain but we started to feel the impact on Thursday,” said Fernando Munoz, who owns uniform maker Unifer and is a board member of top trade lobby Canaive’s Yucatan state branch. “Production was stalled for around three days.”
Yucatan makes roughly 2 million garments per month at an average price of $20 for shipment to the U.S. and the Caribbean, according to Munoz. Based on roughly $40 million in monthly production, three days would have cost the sector about $4 million.
The region, home to the popular beach resorts of Tulum and Cancun, is home to large maquila plants that make clothing for Nike , Levi’s and La Perla, among other top international labels.
Yucatan is also a top maker of so-called guayaberas or tropical Mexican shirts sold by leading brands such as Abitto, La Plaza del Recreo and Katab. The export of guayaberas, of which Yucatan makes 110,000 monthly, has become such a big identiy symbol that the city of Merida hosts an annual guayabera day on March 21.
Despite losses from Beryl, a category 2 storm that forced massive evacuations, Munoz is confident Yucatan makers—as well as those across Mexico —will quickly recover. Encouraged by a weaker peso currency, U.S. orders are surging and could buoy shipments by 20 percent this year (from a less staggering 7 percent last year), at least for the Yucatan Peninsula.
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“The exchange rate is making it much cheaper for brands to buy in Mexico,” Munoz continued. During the “super-peso” era, which saw the currency soar post-pandemic, many labels began boosting orders from Central and South America, benefiting the likes of Guatemala and Colombia. “But that’s changing now. We are beginning to recover,” Munoz added.
Following a landslide win by incumbent presidential party candidate Claudia Sheinbum last month, which sent Mexican assets lower, Munoz insisted there is now calm after the storm. Some worry that Sheinbaum’s Morena party landslide presidential and congressional wins could usher overly aggressive reforms that would harm Latin America’s second-largest economy.
“We are happy with Sheinbum who we think is very prepared to lead this country,” said Munoz, adding that so far her pledged economic and labor overhauls are not alarming the industry.
Indeed Sheinbum, who takes office in October, seems keen to boost near-shoring investments for the country, which is already a huge Latin American winner of the sourcing-close-to-home trend that’s shunning China and Asia.
“There are new tax incentives coming for Puerto Progreso, a huge port town. “Manufacturers investing there won’t have to pay taxes for three years. After that, they will pay depending on their production volumes.”
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