Slide presentation on national and local economic conditions given to the New Mexico Bankers Association on 18 March 2011. Illustrates the effects of the  Great Recession  on economic growth, followed by a forecast of economic conditions for New Mexico in 2011. Includes charts, tables, and maps

Reynis, Lee A.

English

University of New Mexico

University of New Mexico
UNM Digital Repository
BBER Publications Bureau of Business and Economic Research
3-18-2011
The New Mexico Economy: Recent Developments
and Outlook
Lee A. Reynis
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Reynis, Lee A.. "The New Mexico Economy: Recent Developments and Outlook." (2011). https://digitalrepository.unm.edu/bber/
63
University of New Mexico
Bureau of Business and Economic Research
The New Mexico Economy :  Recent 
Developments and Outlook
March 18, 2011
Dr. Lee A. Reynis, Director
lreynis@unm.edu
UNIVERSITY OF NEW MEXICO
BUREAU OF BUSINESS AND ECONOMIC RESEARCH
303 Girard Blvd. NE
MSC06 3510 / Onate Hall
Albuquerque, New Mexico 87131
University of New Mexico
Bureau of Business and Economic Research
Data Bank
FOR- UNM Economic Forecasting Service
Census Project
Demographic and economic estimates and projections,
economic and fiscal impact analyses, government finance,
surveys, policy studies, economic research…
BBER (505) 277-2216
Fax                     277-7066
Data Bank 277-6626
Fax                     277-2773
http://bber.unm.edu/
UNM Bureau of Business and Economic Research
The National Economy
UNM Bureau of Business and Economic Research
The US economy was officially in recession from Dec. 07  until 
June 09 – the longest and deepest recession in decades.
Annual Growth in US Real Gross Domestic Product 
Chained 2000 Dollars
1.9%
3.3%
2.7%
4.0%
2.5%
3.7%
4.5%4.4%
4.8%
4.1%
1.1%
1.8%
2.5%
3.6%
3.1%
2.7%
1.9%
0.0%
-2.6%
2.8%
3.2%
2.9%2.9%
3.3%
3.0%
-3.0%
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15
Global Insight, March 2011
-0.2%
Forecast
The economy lost 8.7 million jobs before things began to turn 
around in early 2010. Economy has added 1.2 million jobs since 
then, with 186 thousand in Feb.  Unemployment rate is now 8.9%.
UNM Bureau of Business and Economic Research
US Nonfarm Employment and Unemployment
Seasonally Adjusted
129,000
130,000
131,000
132,000
133,000
134,000
135,000
136,000
137,000
138,000
139,000
01 02 03 04 05 06 07 08 09 10 11
Th
ou
sa
nd
s 
of
 p
er
so
ns
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
U
ne
m
pl
oy
m
en
t R
at
e
Nonfarm SAAR
Unemployment Rate
Source:  US Bureau of Labor Statistics
UNM Bureau of Business and Economic Research
Many of the problems began in the housing industry where
low mortgage rates and loose lending standards created a 
housing bubble.  Housing remains incredibly weak as does 
construction generally …
Mortgage Rate and US Housing Starts
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
2.0
2.2
02 03 04 05 06 07 08 09 10 11 12 13 14 15
M
ill
io
ns
 o
f U
ni
ts
, S
A
A
R
4.0
4.5
5.0
5.5
6.0
6.5
7.0
7.5
M
or
tg
ag
e 
R
at
e 
(%
)
Housing Starts (Millions SA)
30-Year Fixed Rate Mortgage
%
Source:  Global Insight,, March 11
Forecast
UNM Bureau of Business and Economic Research
Policies have been getting traction. However, still almost 6 
years before employment reaches previous high with 
unemployment still well over 7.0% -- the new normal.
The New Mexico Economy
-10%
-5%
0%
5%
10%
15%
50 55 60 65 70 75 80 85 90 95 00 05 10
Calendar Year
New Mexico
US
New Mexico and the US:  Nonfarm Employment Growth
Over Previous Business Cycles and National Recessions
% chg month over same month year ago, not seasonally adjusted
UNM Bureau of Business and Economic Research
Composition of NM Payroll Employment, 2009
Private Nonfarm Establishments 75.5% 82.8%
  Natural Resources & Mining 2.2% 0.5%
  Construction 5.9% 4.6%
  Manufacturing 3.7% 9.1%
  Wholesale Trade 2.7% 4.3%
  Retail Trade 11.3% 11.1%
  Transp, Whsg & Utilities 2.8% 3.7%
  Information 1.8% 2.1%
  Financial Activities 4.1% 5.9%
  Professional & Business Services 12.6% 12.7%
  Education & Health Services 14.6% 14.7%
  Leisure & Hospitality 10.4% 10.0%
  Other Services 3.5% 4.1%
Government 24.5% 17.2%
  Federal 3.9% 2.2%
  State 7.3% 4.0%
  Local 13.3% 11.1%
Total Nonfarm Payrolls 100% 100%
Source:  NM Dept of Workforce Solutions, US Bureau of Labor Statistics, IH S Global Insight
Total Nonfarm Payrolls
New Mexico United States
May be insulated from some effects, not others…
UNM Bureau of Business and Economic Research
New Mexico and US Nonfarm Employment 
Quarterly % Change over Quarter Year Ago 
2.0 2.2
2.6
2.3
3.2 3.1
2.8
2.5
1.8
1.2 1.1 1.4 1.0 0.8
0.5
(0.8)
(2.9)
(4.2)
(4.7)
(4.5)
(2.7)
(0.9)(1.0)
(0.7)
0.7 0.5 0.6
1.0 1.2
1.3 1.4 1.1
-8.0
-6.0
-4.0
-2.0
0.0
2.0
4.0
05 06 07 08 09 10 11 12
New Mexico
US
Forecast
UNM BBER FOR-UNM, Jan 11 and HIS Global Insight, Mar 11
Reflects official NM DWS figures for final quarter (CES)
The Great Recession in New 
Mexico has been distinguished by 
its depth, by its length, by the 
numbers of people impacted, and 
by its breadth:
Geographic…
UNM Bureau of Business and Economic Research
Geographic spreading of the recession in New Mexico
UNM Bureau of Business and Economic Research
And of the recovery.
Year-over-year 
employment growth
a year later, 2010 Q2
UNM Bureau of Business and Economic Research
And by the severity of 
the impacts across 
industrial sectors …
Growth in NM Wage & Salary Employment, 2000-08
UNM Bureau of Business and Economic Research
Note:  Figures for State & Professional & Business Services adjusted to 
reflect current ownership of Los Alamos National Laboratory.
Source:  NM Dept of Workforce Solutions, 
Bureau of Economic Analysis (military)
-10,000 -5,000 0 5,000 10,000 15,000 20,000 25,000 30,000
     MANUFACTURING 
     INFORMATION 
     MILITARY EMPLOYMENT
     FEDERAL GOVERNMENT
     TRANSP, WHSG & UTILITIES 
     WHOLESALE TRADE 
     FINANCIAL ACTIVITIES
    ARTS, ENTERTAINMENT & RECREATION
     OTHER SERVICES
     EDUCATIONAL SERVICES 
     RETAIL TRADE
     NATURAL RESOURCES & MINING 
     STATE GOVERNMENT
     ACCOMODATION & FOOD SERVICES
     PROF & BUSINESS 
     CONSTRUCTION 
     LOCAL GOVERNMENT
     HEALTH CARE & SOCIAL ASSISTANCE 
Change in Nonfarm Employment  = 102,067
Growth by industrial sector, before…
Change in New Mexico Employment
2008 to 2009
-10,000 -8,000 -6,000 -4,000 -2,000 0 2,000 4,000
     CONSTRUCTION 
     PROF & BUSINESS 
     MANUFACTURING 
     RETAIL TRADE
     NATURAL RESOURCES & MINING 
     ACCOMODATION & FOOD SERVICES
     TRANSP, WHSG & UTILITIES 
     WHOLESALE TRADE 
     INFORMATION 
     OTHER SERVICES
     FINANCIAL ACTIVITIES
     STATE GOVERNMENT
     LOCAL GOVERNMENT
MILITARY EMPLOYMENT, THOUSANDS
     FEDERAL GOVERNMENT
     EDUCATION AND  HEALTH CARE
Change in NM Nonfarm
Employment = -34,400
NM Dept of Workforce Solutions, March 2011
Change in New Mexico Employment
2009 to 2010
-10,000 -8,000 -6,000 -4,000 -2,000 0 2,000 4,000
     PROF & BUSINESS 
     CONSTRUCTION 
     RETAIL TRADE
     MANUFACTURING 
     FINANCIAL ACTIVITIES
     LOCAL GOVERNMENT
     TRANSP, WHSG & UTILITIES 
     STATE GOVERNMENT
     ACCOMODATION & FOOD SERVICES
     INFORMATION 
     OTHER SERVICES
     WHOLESALE TRADE 
     NATURAL RESOURCES & MINING 
MILITARY
     EDUCATION AND  HEALTH CARE
     FEDERAL GOVERNMENT
Change in NM Nonfarm
Employment = -10,800
New Mexico, Recurring General Fund Revenues 
Actual Actual Forecast Actual
Millions of Dollars FY 08 FY09 FY10 FY 10
(Dec 09 adj) 7/23/2010
Total $6,015 $5,320 $4,831 $4,799
General Sales 1,923 1,902 1,760 1,687
Income Taxes 1,568 1,121 1,158 1,065
Mineral Taxes 626 440 357 394
Rents & Royalties 610 544 335 422
NM Legislative Finance Committee, Dec 2009 and Dec 2010 
UNM Bureau of Business and Economic Research
The Economic Forecast for 
New Mexico
UNM Bureau of Business and Economic Research
Positive but subdued employment growth:  
0.7% in 2011; 1.5% or less thereafter…
UNM Bureau of Business and Economic Research
Annual Growth in Nonfam Employment 
New Mexico and US
0.9%
2.8%
4.1%
5.0%
3.8%
1.8%2.0%1.6%
1.4%
2.1%
1.7%
1.2%1.2%
1.9%
2.3%
2.9%
1.4%
0.4%
-4.1%
-1.0%
0.7%
1.3%
1.4% 1.5%
1.3%
-5.0%
-4.0%
-3.0%
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15
New Mexico
US
Source:  FOR-UNM, Jan 11
            Global Insight, Mar 11
Forecast
UNM Bureau of Business and Economic Research
Quarterly Unemployment Rate
US and New Mexico, SAAR
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
11.0
12.0
99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15
New Mexico
US
Forecast
Source:  Global Insight, Marr 11; BBER FOR-UNM, Jan 10
Annual Growth in Personal Income 
Albuquerque MSA, New Mexico, US
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15
Albuquerque MSA
New Mexico
US
Source:  US Bureau of Economic Anlaysis;  Global Insight, 
Mar 11 ,  FORUNM, Jan 11
Forecast
-6.0%
-5.0%
-4.0%
-3.0%
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
New Mexico
US
Albuquerque
Santa Fe
Las Cruces
Farmington
Forecast
Annual Growth in Nonfarm Employment
US, NM, Albuquerque, Santa Fe, Las Cruces and Farmington
Source:  Global Insight, FORUNM, Nov 10
Among the MSAs, Las Cruces will grow the fastest…
UNM Bureau of Business and Economic Research
Construction.  Bottoming out.  Then what?
UNM Bureau of Business and Economic Research
Construction Employment
New Mexico and Albuquerque
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15
New Mexico
Albuquerque
Source:  FOR-UNM,  Jan 11
Forecast
Federal Housing Finance Agency Housing Price Indexes
All Trans Index, 2010 Q3
‐40
‐30
‐20
‐10
0
10
20
30
40
50
86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10
%
 Ch
an
ge
Albuquerque, NM
Santa Fe, NM
Phoenix‐Mesa‐Glendale, AZ
Las Vegas‐Paradise, NV
Denver‐Aurora‐Broomfield, CO
Tucson, AZ
UNM Bureau of Business and Economic Research
New Single 
Family
New Multifamily
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15
Forecast
Source:  BBER FORUNM,  Nov 2010
New Mexico Housing Units Permitted
UNM Bureau of Business and Economic Research
UNM Bureau of Business and Economic Research
New Mexio Dollar Value of Construction Awards
($000,000)
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
5,500
6,000
81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10
Non-Building
Non-Residential
Residential
SOURCE:  FW DODGE
National Enrichment Facility
$1.4 billion
Mining and extractive industries…
Run-up in oil & gas prices culminated in 2008 spike and 
August 2008 collapse.  Oil prices once again above $100/b.
UNM Bureau of Business and Economic Research
N e w  M e xico  M in ing  Em p loym e nt
1 2 ,50 0
1 3 ,50 0
1 4 ,50 0
1 5 ,50 0
1 6 ,50 0
1 7 ,50 0
1 8 ,50 0
1 9 ,50 0
2 0 ,50 0
2 1 ,50 0
2 2 ,50 0
9 0 91 9 2 9 3 94 95 96 97 9 8 99 0 0 01 02 03 0 4 05 0 6 0 7 08 09 1 0 11 1 2 1 3 14
S ou rce :  B BE R FO R-U NM, Jan  11
F ore cas t
Manufacturing, an 
important sector with 
a shrinking workforce…
And an industry 
subject to 
considerable
volatility
UNM Bureau of Business and Economic Research
New Mexico Manufacturing Employment
27,000
29,000
31,000
33,000
35,000
37,000
39,000
41,000
43,000
45,000
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
Source:  FOR-UNM,  Nov 10
Forecast
Annual % Change in Manufacturing Employment
Albuquerque MSA, New Mexico, US
-20.0%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
Albuquerque
New Mexico 
US
Source:  US Bureau of Labor Statistics &  NM Dept of Workforce Solutions
                   Global Insight, Nov 10;  FORUNM, Nov 10
Forecast
Manufacturing…
New Mexico Exports to Other Countries
Quarterly, in Dollars
0
100,000,000
200,000,000
300,000,000
400,000,000
500,000,000
600,000,000
700,000,000
800,000,000
900,000,000
97.1 98.1 99.1 00.1 01.1 02.1 03.1 04.1 05.1 06.1 07.1 08.1 09.1 10.1
TOTAL ALL INDUSTRIES
COMPUTER & ELECTRONIC PRODUCTS
Source:  MISER
Destination Countries for New Mexico Exports 
2010
Other
32.0%
United Kingdom
1.8%
Singapore
2.1%
Mexico
27.5%
Japan
4.0%
Canada
18.0%
Germany
7.2%China
4.6%
Spain
2.6% DESTINATION COUNTRIES FOR NM EXPORTS, 2006
CHINA (Taiwan)
5%
JAPAN
2%
other
20%
CHINA 
(MAINLAND)
25%
CANADA
7%
MALAYSIA
17%
PHILIPPINES
9%MEXICO
9%
KOREA REPUBLIC 
4%
Employment Growth in Professional and Business 
Services
5.9%
2.8%3.2%
6.2%
7.6%
2.2%
0.9%
3.6%
4.3%
5.3%
2.8%
0.7%
-0.8%
1.7%
3.0%
10.6%
6.0%
-0.3%
-5.4%
-4.2%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10
New Mexico
US
Los Alamos 
Contractor 
Change
New Mexico Employment in Education and 
Healthcare Services
0%
1%
2%
3%
4%
5%
6%
7%
8%
91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10
Source:  NM Dept of Workforce Solutions
Government Employment in New Mexico
All Levels Indexed to 1992
0.6
0.8
1.0
1.2
1.4
1.6
1.8
92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15
Local
State
Federal Civilian
Military
Source:  FOR-UNM, Nov 10
Forecast
Government – Federal Civilian & Military, State & Local
LOS ALAMOS 
CONTRACTOR 
CHANGES
UNM Bureau of Business and Economic Research
New Mexico Legislative Finance Committee, Consensus General Fund Revenue Estimates, 
Dec. 2010
Fiscal Dilemma:  the State’s General Fund
UNM Bureau of Business and Economic Research
Removing the Safety Net
NM Human Services Dept caseloads continue to 
rise, but ARRA funding to meet needs is about to 
end, as will the funding that has kept schools 
open and teachers working, that has helped 
people who lose their health insurance to continue 
to access needed services…
UNM Bureau of Business and Economic Research
Trends in NM Human Services Dept CaseloadUNM Bureau of Business and Economic Research
New Mexico is slowly pulling out of deepest and longest recession since the 
1930’s.
Sectors which have traditionally cushioned the impacts of national recessions
on NM – federal, state and local government, professional and technical
business services – are less able to play a stabilizing role this time around.  
The construction industry, which, in the aftermath of previous recessions 
bounced back, remains depressed.   The is an oversupply of housing and with 
foreclosures adding to the stock.  Governments have no money.  Businesses 
await the recovery of demand.
Unlike other parts of the country, NM does not appear to be benefitting from an 
export boom.
The healthcare services sector which has led NM growth for over a decade is 
heavily dependent on state and federal funding – Medicaid, Medicare, Veterans 
Administration, TriCore, Indian Health Service – which is threatened by the fiscal 
crisis facing governments at all levels and the perceived need to tackle 
immediately the problem of the federal deficit.


The New Mexico Economy: Recent Developments and Outlook

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The New Mexico Economy: Recent Developments and Outlook

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