Mexico formal employment growth slows in first half as economic weakness weighs on hiring

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Mexico formal employment slowdown

Highlights

Mexico adds 262,600 formal jobs in the first half of 2026, the second lowest figure for the period since 2004, as economic weakness persists.
Job creation is driven by 106,300 new positions in construction and 62,500 in manufacturing, while the tertiary sector adds 115,900 jobs, 42.8% below its average.
HR Ratings forecasts total 2026 formal job creation at 300,000, with weak manufacturing hiring, uncertain USMCA renewal, and the average real wage up only 2.94%.

First-half hiring trends and sector breakdown

As reported by HR Ratings, 61,000 formal jobs are added in June after a contraction of 30,000 in the previous month, but the broader first-half figures still point to a weak economic backdrop.

The ratings firm says Mexico’s economy is expected to post growth in the second quarter after the 0.6% quarter-on-quarter drop seen in 1Q26, yet formal employment data indicate that the rebound is moderate, particularly in manufacturing and construction.

Job creation reaches 262,600 positions in the first six months of 2026, the second lowest first-half total since 2004, when 257,800 jobs are recorded, excluding financial crisis and COVID-19 periods as well as the slowdown seen in 2025.

The weakness in 2026 hiring is attributed largely to the tertiary sector, especially commerce and transport, while agriculture continues to eliminate jobs for a fourth consecutive year. Although the market shows some recovery from the previous year, new jobs remain 38.5% below a stable job-creation period average, highlighting persistent pressure on economic activity.

Within the industrial sector, 175,800 jobs are accumulated, driven by 106,300 positions in construction and 62,500 in manufacturing. The tertiary sector adds 115,900 new registrations, 42.8% below its average level, reflecting job losses of 31,000 in commerce and subdued momentum in transport and communications, which post 28,000 affiliations in the first half.

Outlook for investment, trade and wages

HR Ratings expects formal employment to continue showing a mixed pattern in the second half of 2026, with weak job creation in manufacturing. The firm says a renewal of the U.S.-Mexico-Canada Agreement is not anticipated by the end of July, a scenario that is expected to weigh on transport manufacturing, parts production and the arrival of new investment.

By contrast, higher investment in public and private construction, supported by Plan Mexico, could boost job generation in construction toward year-end, alongside moderate gains in consumption and services. Based on that outlook, HR Ratings estimates total formal job creation of 300,000 in 2026.

The average real wage also shows slower momentum, advancing 2.94%, the weakest level since December 2022. That trend reflects part of the strain from weaker private consumption.

Our earlier report on Canada’s youth workforce plan highlighted Ottawa’s push to expand skilled-trades recruitment and training, including a goal to recruit, train and hire up to 100,000 new Red Seal trades workers over five years. It also outlined paid entry-level placements in construction and broader programs expected to create about 175,000 youth job and skills-development opportunities, including roles tied to digital and high-demand sectors.

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