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Mexico's export economy is in recession, with three consecutive quarters of negative growth. US suppliers to Mexico's maquiladora industry are hard pressed to sell their raw materials, let alone new technology. Nonetheless, pockets of Mexican industry continue to grow, mostly because their products are destined to consumer markets, which are still growing.

The packaging industry is a good example. The industry's most important customer is the food and beverage sector, where basic recession-proof products account for 63 percent of demand for packaging materials. Another 25 percent of packaging is consumed by the pharmaceutical and cosmetics industries. Given the continued growth expectations for domestic consumer demand in Mexico (see April 2001 Tendencias), Mexican production of packaging materials is expected to grow by 5 percent in both 2001 and 2002.