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New Mexico is No. 1 in export-related job growth

Copyright © 2015 Albuquerque Journal

It’s not often New Mexico can brag of being top dog on a nationwide business list, but the state is being recognized as the fastest-growing place in the country for jobs related to international exports.

A U.S. Commerce Department report to be released today says local jobs supported directly and indirectly by state exports to other countries grew 107 percent over the last five years, from about 8,000 in 2009 to 16,500 last year. That’s substantially faster than the closest runners-up: Louisiana and Hawaii, with 66 percent growth, and South Carolina and Washington state, with 38 percent each.

EXPORTS“New Mexico was the No. 1 state in growth in trade-supported jobs,” U.S. Trade Representative Michael Froman told the Journal. “We’re talking about good-paying jobs that generally pay up to 18 percent more than non-export jobs.”

The report provides a state-by-state breakdown on number of jobs supported by exports and number of businesses selling overseas. For New Mexico, the report counts 1,343 exporting businesses around the state, nearly 83 percent of them small- and medium-sized companies.

“This is not just a ‘big company story,’ because generally, about 98 percent of exports in the U.S. come from small- and medium-sized businesses,” Froman said. “It shows many companies are taking advantage of huge opportunities in fast-growing markets around the world.”

The state ranked No. 1 nationwide last year for growth in exports to Mexico, with the value of goods shipped south of the border nearly doubling from $800.7 million in 2013 to $1.55 billion.

New Mexico exports worldwide reached $3.8 billion in 2014. That’s three times more than the $1.27 billion it shipped five years ago.

In raw numbers, New Mexico’s export-related jobs are small compared with other states. Louisiana, for example, had 170,000 jobs supported by trade in 2014, and Washington nearly 391,000.

But given New Mexico’s small population and its traditional lack of a major manufacturing base compared to other places, an increase of 8,000 jobs over five years is significant, New Mexico Economic Development Secretary Jon Barela said.

“It’s like gaining one to two Tesla Motors,” Barela said, referring to state efforts last year to convince Tesla to build a battery factory here with 6,500 jobs. “It’s fabulous news.”

Dynamic sector

New Mexico’s trade-related growth reflects a near sea change in the state’s export patterns in recent years, with foreign commerce emerging as one of the state’s most dynamic economic sectors.

Team Technologies, an engineering and contract manufacturing firm in Albuquerque that has relied on work with the state’s national laboratories, is diversifying its base through investments in Mexico. The company established a machine shop in Chihuahua City this year for engineering work with aviation firms there in partnership with Mexican investors.

“Our Mexican partners manage large parts like landing gear and we’re doing smaller precision parts,” company President and CEO Robert Sachs said. “We need to expand beyond federal contracts, and this puts our foot in the door internationally.”

Trade with Mexico reflects a boom in industrial activity at business parks in Santa Teresa along the border, where scores of companies are supplying Mexico’s thriving “maquila,” or assembly industry, said Jerry Pacheco, executive director of the International Business Accelerator at Santa Teresa.

“More New Mexico businesses statewide have delved into exporting in recent years, but the real driving force is in the border region,” he said.

About 65 companies now operate at Santa Teresa, with about 4,000 people employed in or around the area’s three industrial parks.

In addition, many businesses statewide are exploring global markets as a central strategy to grow their companies, Barela said. Many are encouraged by emerging trade opportunities in foreign markets, greater ability to manage commerce through the Internet and state programs to educate entrepreneurs and assist them with export challenges.

The Commerce Department has helped fund a State Trade Export Promotion program through the New Mexico Economic Development Department since 2012 that has benefitted dozens of businesses through trade missions to different countries, workshops and seminars on exporting, and individual consulting.

The city of Albuquerque and Bernalillo County also established a Trade Alliance in 2012 to offer education and assistance to local companies. And, the city, the state and the University of New Mexico jointly established a trade office in Mexico City last August to reinforce academic ties and commerce with Mexico.

“These types of trade programs are critical to get companies to think about markets internationally,” said Randy Trask of Encuentro Inc., which manages the city-county Trade Alliance contract.

Companies in Albuquerque and around the state say they’re finding lucrative trade opportunities in Latin America, Asia and Europe.

Karl Halper, president and CEO of the Taos-based natural products firm Private Label Select, said his company is earning about 10 percent of its revenue from exports to Asian, European and Canadian markets after participating in various state-sponsored trade missions.

“We’re looking to increase that to 30 to 35 percent now,” Halper said. “A growing middle class in places like China and Southeast Asia and the desire for quality products from the U.S. are creating a perfect storm of opportunity for us.”

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