Formal business registrations in Baja California fell 9.2% in the first five months of 2026, according to new data from the Mexican Social Security Institute (IMSS). Only 3,097 new employers registered between January and May 2026, down from 3,410 during the same period in 2025, a net loss of 313 new businesses.
The IMSS figures track employers who formally register workers for social security benefits. The decline comes as Baja California’s economy continues to struggle after entering a recession in late 2025, when INEGI (the National Institute of Statistics and Geography) reported a 2.2% contraction in the state’s third-quarter economic output.
Business Leaders Point to Multiple Causes
Local business executives have identified four primary factors behind the slowdown: the ongoing economic recession, persistent insecurity, high taxes, and bureaucratic obstacles to opening new businesses. Leaders from the state’s business councils have called on government officials to improve public security and streamline permitting processes.
The warning from business groups is direct: without meaningful government action on these fronts, the second half of 2026 could bring only marginal recovery or further decline. Roberto Lyle Fritch, president of the Business Coordinator Council in Tijuana, had flagged similar concerns as early as mid-2025, citing job losses, company closures, and paused investment across the state.
Broader Economic Context
Baja California’s workforce stood at 1.77 million people in the first quarter of 2026, according to federal economic data, with an average monthly salary of approximately 8,600 pesos (around $430 USD). The state’s economy remains heavily tied to manufacturing, with international sales reaching $5.6 billion USD in April 2026 alone. Monitors and projectors led exports at $660 million USD that month.
Despite the strong export sector, domestic business formation has not kept pace. The gap between the manufacturing economy’s output and the local entrepreneurial climate is widening. Fewer new businesses opening means fewer formal jobs being created outside the maquiladora sector, with potential ripple effects on commercial rents, consumer spending, and service availability in cities like Tijuana, Mexicali, and Ensenada.
The IMSS registration data covers only formal employers. Informal businesses, which make up a significant share of Mexico’s economy, are not captured in these figures. The actual contraction in new business activity could be larger or smaller than the 9.2% drop recorded in the formal sector.
This story was first reported by Baja California Post.