Glimmer of hope for NM's economy - Albuquerque Journal

Glimmer of hope for NM’s economy

Copyright © 2014 Albuquerque Journal

This overpass is being constructed on the east side of Interstate 25, near Osuna NE. The construction employment sector in Albuquerque is still having trouble getting back to normal. (Journal File)
This overpass is being constructed on the east side of Interstate 25, near Osuna NE. The construction employment sector in Albuquerque is still having trouble getting back to normal. (Albuquerque Journal File)

Official employment numbers for New Mexico are bleak, but the reality, while far from good, may not be quite so bad, according to the Journal’s twice-yearly Economy Watch review of economic conditions.

“We’re not growing rapidly,” said Lee Reynis, director of the University of New Mexico Bureau of Business and Economic Research, which conducts the review. “I’m not even sure we’re growing at 1 percent. But in my opinion, based on everything I look at, we are definitely on the positive side.”

The state Department of Workforce Solutions reported earlier in April that New Mexico lost 1,000 jobs between March 2013 and March 2014, and the March unemployment rate increased to 7 percent from 6.7 percent a month earlier. The Albuquerque metropolitan statistical area added almost 1,400 jobs in the 12-month period, but the unemployment rate was 7.6 percent, according to DWS.

Reynis thinks recently completed, routine statistical adjustments to the nation’s jobs numbers, known as benchmarking, are probably overstating job losses in New Mexico.

“A variety of things is happening that says we have positive but slow growth,” she said.

For example, household surveys show employment grew 0.7 percent in both January and February compared with the same months a year earlier. Trends in the data over the past several months show the gap in job growth between New Mexico and the rest of the country has narrowed, Reynis added.

A sign of strength?

A line of job seekers waits to get into the recent Choice Career Fairs' Albuquerque Career Fair at Hotel Cascada. Albuquerque and New Mexico employment numbers, while still bleak, are believed to be on the "positive side," according to UNM economist Lee Reynis. (Albuquerque Journal File)
A line of job seekers waits to get into the recent Choice Career Fairs’ Albuquerque Career Fair at Hotel Cascada. Albuquerque and New Mexico employment numbers, while still bleak, are believed to be on the “positive side,” according to UNM economist Lee Reynis. (Albuquerque Journal File)

Rising unemployment rates even can be a sign of strength in the economy, Reynis said. Since only people who say they are looking for work are counted as unemployed, an increase in the unemployment rate absent evidence of economic decline can show that jobless workers have become more confident they can find a job and have begun looking for work again.

The household surveys that generate the unemployment numbers also reveal some disturbing things, Reynis said.

The unemployment rate in New Mexico for 2013 was 7.2 percent. However, if people who want to work but have given up trying to find work – known as marginally attached workers – are counted, the 2013 unemployment rate goes to 8.3 percent.

Add workers who want full-time jobs but can only find part-time jobs and the rate reaches 13.7 percent.

“Those numbers kind of help put things into perspective,” Reynis said. “We have a much larger problem with unemployment than we see in the (usual) numbers. That’s true at the national level. It’s true everywhere.”

Government reliance

Iron workers install rebar on March 24 for the supports of the Paseo del Norte overpass at Jefferson NE, part of the reconstruction of the I-25 and Paseo interchange. (Albuquerque Journal File)
Iron workers install rebar on March 24 for the supports of the Paseo del Norte overpass at Jefferson NE, part of the reconstruction of the I-25 and Paseo interchange. (Albuquerque Journal File)

New Mexico’s reliance on government employment goes a long way toward explaining the problem, Reynis said. Counting both workers who receive a government paycheck and those who work for firms that contract with government agencies, 32 percent of the state’s workforce relies on government spending.

“That makes us very vulnerable,” she said.

New Mexico lost 2,800 government jobs between March 2013 and March 2014, but that doesn’t count nongovernment workers whose employers rely on government spending.

“Government wage and salary disbursements growth is close to zero or negative because of what has happened to the federal government” through budget cuts, Reynis said.

The doldrums afflicting New Mexico’s economy show up in two major ways: construction and population growth.

“Our economic booms are coincident with housing booms,” she said. “Housing and construction in general should be a reflection of what’s happening in your economy. When businesses expand they require people, and people require housing.” The housing booms have stopped, Reynis said.

Population growth in 2013 “was very close to zero,” she said, largely because more people are moving out of the state than are moving in. “If you have population growth, you’re going to stimulate demand for housing and all sorts of things.”

Slowing population growth is “one of the things that will hold us down” economically, she said.

Losing educated people

Home construction in the Albuquerque metro is still struggling to recover. (Albuquerque Journal File)
Home construction in the Albuquerque metro is still struggling to recover. (Albuquerque Journal File)

Population data for 2013 are not available yet, but census data show New Mexico is losing people it can’t afford to lose. It appears a disproportionate number of educated people are leaving the state because job prospects are better elsewhere.

Of the total workforce that left New Mexico in 2013, 19 percent were employed in the professional and business services category and 18 percent were employed in the education and health services sector. Construction workers accounted for 4 percent of the workers who left New Mexico.

 

BizO_EconoWatch

Home » Business » Outlook » Glimmer of hope for NM’s economy


Albuquerque Journal and its reporters are committed to telling the stories of our community.

• Do you have a question you want someone to try to answer for you? Do you have a bright spot you want to share?
   We want to hear from you. Please email yourstory@abqjournal.com

taboola desktop

1
First housing project for deaf, hard-of-hearing underway
ABQnews Seeker
Twenty-year effort takes its name from ... Twenty-year effort takes its name from the ASL sign for 'finally'
2
Albuquerque solar company reports $22M loss in Q1
ABQnews Seeker
Albuquerque-based Array Technologies has taken a ... Albuquerque-based Array Technologies has taken a beating since going public in October 2021 on the Nasdaq Global Market, with inflation and supply-chain challenges eroding ...
3
Robotics, medical vending machines, and 20K tons of steel: ...
ABQnews Seeker
Amazon gives update on New Mexico ... Amazon gives update on New Mexico presence, gives first official tour
4
Meow Wolf announces two new exhibits in Texas
ABQnews Seeker
The new locations have been on ... The new locations have been on the company's radar for more than two years
5
Old Town shopkeepers say parking is a perpetual problem
ABQnews Seeker
Old Town shopkeepers hear about it ... Old Town shopkeepers hear about it all the time: customers complaining about parking near their Old Town shop. At Old Town Hobbies and Games, ...
6
Albuquerque med spa opens West Side location
ABQnews Seeker
Taylor Ranch site will be company's ... Taylor Ranch site will be company's flagship location
7
Multigenerationalism can help startups thrive
ABQnews Seeker
Editor's Note: Throughout 2022, New Mexico ... Editor's Note: Throughout 2022, New Mexico Angels' members, investors and startup owners will be writing columns on economic development and startup opportunities in the ...
8
Border flub cost US GDP hundreds of millions
ABQnews Seeker
Second in a series. On May ... Second in a series. On May 23, the federal government is slated to revoke Title 42, which allows it to immediately deport to Mexico ...
9
Alito’s now-leaked opinion casts doubt on SCOTUS
ABQnews Seeker
  In the 1320s, the Roman ...   In the 1320s, the Roman Catholic Church was shaken by a dispute about papal infallibility. The pope's position on the issue wasn't what ...
10
Yes, employers can change the rules for at-will employees
Business
Dear J.T. & Dale: My company ... Dear J.T. & Dale: My company just announced that they have changed their policy. They announced at the end of last year that they ...