Mexico City dominates the nation’s economy. The Federal District produces a significant portion of Mexico’s gross domestic product, or GDP (the total value of goods and services produced in the country). Mexico City is the center of a manufacturing belt that stretches from Guadalajara in the west to Veracruz on the Gulf of Mexico in the east. Manufactures include textiles, chemicals and pharmaceuticals, electrical and electronic items, steel, and transportation equipment. In addition, a variety of foodstuffs and light consumer goods are produced.
The city plays a dominant role in Mexico’s banking and finance industries. It is home to Banco de México (federal reserve bank), the Bolsa (stock exchange), and every major banking chain in the country. All major financial services, including insurance companies, are centered in Mexico City.
Agriculture, mining, and trade dominated Mexico City’s economy for most of its history. An industrial economy began to take root in the early 1900s. However, industry did not become the leading economic activity until government investment programs encouraged large-scale growth of manufacturing and other industrial production in the city in the 1940s and 1950s.
During the 1980s, however, the government began to encourage industrial and manufacturing development in other areas of the country in an attempt to reduce pollution and overcrowding in the city. These attempts led to the decline of industrial production and employment in the city. From 1980 to 1988, Mexico City lost almost 100,000 (about 25 percent) of its industrial jobs. Although the city has lost industrial and manufacturing jobs, other sectors of its economy, notably services and commerce, have grown.
The concentration of economic activity in the city attracted people from rural areas in search of employment. People moved to the city faster than new jobs were created. Many of these new residents of Mexico City were unskilled workers. They were unable to find employment in the city, contributing to problems of unemployment and underemployment.