Forgot Password?  

NM lacks engine to power growth

Copyright © 2014 Albuquerque Journal

New Mexico’s job growth continues to lag the nation, but that is not the worst of it, said Jeffrey Mitchell, the new director

The one employer sector showing growth in New Mexico is in the oil and gas industries, focused in southeastern and northwestern parts of the state. Here, students tour a drilling rig site in southeast New Mexico.

The one employer sector showing growth in New Mexico is in the oil and gas industries, focused in southeastern and northwestern parts of the state. Here, students tour a drilling rig site in southeast New Mexico.

of the University of New Mexico Bureau of Business and Economic Research.

“The very weak performance relative to other states seems to cut across the economy,” he said. All employment sectors are under-performing, which leaves New Mexico with no engine to power growth in the economy as a whole.

Advertisement

Continue reading

“If you look at it historically, typically recoveries at any level, but specifically in New Mexico, are driven by one or two very strong sectors which are creating jobs and paying high incomes, which creates demand, and the whole virtuous cycle occurs,” Mitchell said.

Discussing the

Journal‘s twice-yearly Economy Watch review of state and local conditions, Mitchell said the latest Bureau of Labor Statistics survey of businesses shows New Mexico’s employment grew about 0.4 percent in the second quarter. Albuquerque’s growth was “about flat.”

Doubting the data

“We tend to be very skeptical about those numbers,” he said. They are subject to significant revision when

Donald Boucher, second from left, an aerospace engineer at Honeywell, and Lori Fuggiti, from Honeywell's Human Resources, talk to veterans about Honeywell jobs during the fourth annual New Mexico Veterans' Business Expo & Job Fair at the Albuquerque Convention Center this summer.

Donald Boucher, second from left, an aerospace engineer at Honeywell, and Lori Fuggiti, from Honeywell’s Human Resources, talk to veterans about Honeywell jobs during the fourth annual New Mexico Veterans’ Business Expo & Job Fair at the Albuquerque Convention Center this summer.

Census Bureau data begin appearing months after the Labor Department surveys have been released. “I wouldn’t put too much faith in those numbers.”

“For almost any time frame you pick from 2010 through 2013, and now if you take the first quarter of 2014, for which we have real data, New Mexico comes very, very close to the bottom in terms of job growth,” Mitchell said.

That bottom-tier growth rate is true of almost every employment sector as well, he said.

Advertisement

Continue reading

Especially troubling is how badly the professional and business services sector has performed, Mitchell said. “It’s one of the fastest-growing sectors in the U.S. economy, and it tends to be an area in New Mexico that is really dragging.”

This sector captures employment of relatively well-paid jobs for lawyers, architects, engineers, researchers and scientists. The sector’s performance reflects continuing problems in the construction industry and cuts in spending by the national laboratories, military research facilities and other scientific and engineering employers.

The sector employed 98,300 people in June, according to the state Department of Workforce Solutions. In June 2007, before the national recession hit, the sector employed 108,800. In June of 2009, following the financial panic of September 2008, it employed 105,500 people.

Oil, gas doing well

BBER found that mining, which includes oil and natural gas production, is the only sector in the state that is doing well, but it doesn’t employ that many people, employment seems to help only the northwestern and southeastern part of the state, and employment growth is slowing.

Mitchell said the industry is producing record revenue for the state general fund, but that employment growth, at 6 percent in 2014, is slower than growth in 2012 and 2013.

State and local government payrolls have stabilized after dropping for the past three years. “The private sector isn’t doing much better than it was before, but the public sector is not dragging total employment down,” Mitchell said. “That’s why we’ve gone from slightly negative numbers to flat numbers.”

The Albuquerque area’s poor economy was dragging the state’s performance down as well from 2011 through 2013. Albuquerque employment seems to be stabilizing. Census data from the first quarter of this year were “surprisingly positive,” Mitchell said, showing a 0.8 percent increase in jobs.

“By real-world standards, that’s nothing to write home about, but those are stronger numbers than we’ve seen,” he said.

Shrinking workforce

Economy-watch_2ndQtrNew Mexico’s labor force is also shrinking, and for reasons other than retirement of older workers.

Latest surveys show the state is losing workers at a 0.5 percent annual rate. The workforce nationally is growing.

A Pew Research study shows that before the national recession in 2007 in New Mexico, 79.1 percent of people aged 25 to 55 years were in the labor force. Today that number is 69.9 percent.

Mitchell said that every state has lower workforce participation than was the case in 2007, and 29 states are below their 2007 levels by a statistically significant amount, including New Mexico.

There are no data to show what kinds of workers are leaving the labor market, Mitchell said.

“There is an awful lot of discussion about brain drain (from New Mexico), the flight of professionals,” he said. “No one really has the data to substantiate the argument that we are seeing an out-migration of professionals. That doesn’t mean that it’s not true. Any evidence of it would be anecdotal.”

BBER Research Scientist Michael O’Donnell said that New Mexico’s income growth also is weak, mostly because wage growth is weak, thanks to poor employment prospects.

As of the first quarter of this year, income grew 3.1 percent in New Mexico, but wage and salary income growth was 2.3 percent, largely because government wage and salary income declined 0.2 percent, O’Donnell said.

TOP |