ALBUQUERQUE, N.M. — Job growth returned to New Mexico in 2014, but slowly, and it’s going to take another three years before overall employment in the state returns to its pre-recession level, a University of New Mexico economist said Thursday.
“Albuquerque must be part of the recovery,” Jeffrey Mitchell, director of UNM’s Bureau of Business & Economic Research, told the annual Economic Outlook Conference in Albuquerque.
The state registered 14,700 new jobs as of November compared to a year earlier, which approaches a 2 percent increase. Going forward, the state is forecasted to gain around 10,000 new jobs a year, for annual job growth rates of 1.1 percent this year and 1.3 percent in 2016, Mitchell said.
“Very importantly, Albuquerque, if you go back to 2012, was very negative,” he said. “That will turn.”
New Mexico has missed out on the broad job recovery taking place nationwide, he said, noting that nationwide employment returned to its pre-recession level toward the end of 2014.
“This is very much a tale of two cities,” he said. “New Mexico over the last five years has been a place apart. We have not seen much of what’s happening nationwide happening here.”
New Mexico’s economy has been underperforming those of other states in the Southwest, Mitchell said. Finding the path to catch up to other states does not mean copying what they’re doing in terms of economic development initiatives, he said.
“It’s not a matter of finding somebody else’s model and grafting it onto us,” Mitchell said. “It’s a matter of finding our own.”
Two signs to watch for economic improvement are job gains in the business and professional services employment sector and improvements in housing, he said.
Business and professional services includes a huge chunk of white-collar jobs, running the gamut from lawyers and accountants to architects, engineers and computer techs, according to federal guidelines.
Describing it as a “bellwether of where we’re going,” Mitchell said business and professional services is leading the national rebound in jobs while, in New Mexico, it has been shrinking almost continuously since 2010. The employment sector must expand for the economy to improve, he said.
New Mexico’s heavy dependence on federal spending has been cited as one of the major reasons for the slow recovery and for the shrinkage in the business and professional service category. The latest statistics show that Sandia National Laboratories spending was down by $59 million from fiscal 2013.
As for housing, the pace of home construction needs to improve, although Mitchell cautioned, “In our wildest dreams we’re not getting back to 50 percent of where we were during the boom years (of) 2004-2007.”
Mitchell was among a slate of speakers at the morning conference at the Crowne Plaza Hotel. Presenting sponsors included Wells Fargo Bank, PNM Resources, the city of Albuquerque and BBER.
Wells Fargo Securities senior economist Eugenio Alemán said the employment picture nationwide was “the strongest labor market since 1999” in some ways.
The national picture, however, remains muddy for reasons like the dropping participation rate in the labor force, frozen wages, the high proportion of part-time jobs and prolonged unemployment periods for people out of work, Alemán said.
When asked about the impact of the Affordable Care Act on the nation’s economic growth over the next few years, he replied that the data aren’t clear yet. Based on the simple fact that the national economy grew 5 percent in the first year of the ACA’s rollout, he said, “This is a complete success.”
The act gradually discouraged people from going to a physician or seeking medical services “for fun,” he said, since they are more likely to be liable to pay deductibles in insurance coverage than they were before.
“I know what I’m doing. I’m not going to the doctor as often as I used to because I have to pay for it,” he said. “From a pricing point of view, I think it’s relatively effective because people aren’t going to the doctor unless they’re dying.”