The metro area is on a roll.
Unemployment in the Albuquerque metro area has dropped to 4.2 percent, the number of jobs is growing to nearly the pre-recession peak and the city’s gross-receipts tax collections are returning to health.
“The unemployment rate is a good indicator that our economy is slowly gaining momentum, and the people of Albuquerque are better able to find jobs and support their families,” said city Chief Financial Officer Sanjay Bhakta. “Coupled with our growth in GRT, this is good news for Albuquerque’s economy.”
Unemployment in the metro area dropped from 5.7 percent a year ago to 4.2 percent in May, according to the state Department of Workforce Solutions. The last time it was that low was in June 2008.
The most recent preliminary figures also show that the Albuquerque area saw 7,300 more jobs, or 1.9 percent growth, compared to a year ago. That translates to a total of 397,000 jobs, less than 1 percent below the peak of 400,200 jobs in the metro area, which includes Bernalillo, Torrance, Valencia and Sandoval counties.
Further brightening the economic picture was a 4.4 percent increase in Albuquerque’s gross receipts tax revenue from business activity during the first quarter of the year, to $94.9 million.
The construction industry has been a big driver of job growth in recent months, although the biggest jump in May over the past year came among professional and business services jobs, which grew by 6.3 percent, according to the state figures. That sector includes a wide range of employers, from architectural services and national lab jobs to call center positions.
Mark Flaherty, an economist with the state’s Bureau of Economic Research and Analysis, said he could not pinpoint specific employers who contributed to the boost but said it appeared to be “relatively widespread across the sector.”
The state figures also contained good news for other New Mexico metro areas: Santa Fe’s unemployment rate was down to 3.8 percent compared to 5.2 percent a year ago and Las Cruces’ fell from 6.9 percent to 5.1 percent. Farmington, which was badly hit by the oil-gas industry downturn, saw a May unemplyoment rate of 4.9 percent, compared to 7.1 percent a year ago.
New Mexico’s unemployment rate fell to 5.1 percent last month. After a long slump, the state as a whole is seeing a “rare period” where the cities and the rural areas both are doing well, said Jeff Mitchell, director of the University of New Mexico’s Bureau of Business & Economic Research.
Mitchell, who cautioned that job growth numbers can “change dramatically” once they are adjusted, said the last time that happened in the post-recession period was in early 2014. That was just before the oil slump devastated New Mexico’s oil patch.
“It’s rare for recent periods that this is happening, and the result of this is overall strong growth for the state,” Mitchell said.
The slow and steady growth of jobs in the Albuquerque area is largely due to the construction industry which “has been gaining strength,” he said.
The Facebook data center in Los Lunas has “floated the boat for the last 18 months” when it comes to construction growth, but the real key to recovery in Albuquerque will be the return of residential construction, Mitchell said.
While the number of building permits for single-family homes continues to rise in the metro area, the number remains at about half the pace of activity seen in previous years, according to DataTraq.
New home building ripples across the economy and shows that “builders feel more confident in the longer-term outlook.”
“That’s what a lot of people are waiting for,” Mitchell said. “If residential building joins the party, then you have something truly meaningful.”