But he also warned that the Great Recession may have structurally changed New Mexico — an “extremely troubling” possibility for the future.
Jeffrey Mitchell, director of the UNM Bureau of Business and Economic Research, shared his analysis during a presentation to tax lawyers, state officials, business leaders and others gathered for the annual meeting of the New Mexico Tax Research Institute, a nonpartisan group.
He also had this blunt assessment: Democrats and Republicans ought to quit blaming each other for the economic changes shaping New Mexico.
Elected officials, of course, shape the state budget and tax system, he said, but the economy is far more complicated than that.
“I do not think it’s as simple as political leadership or a governor,” Mitchell said Thursday. “Their influence on the economy is greatly exaggerated on every level.”
New Mexico’s trouble emerging from the Great Recession, he said, may have several explanations. Reductions in federal spending on the military, an inability for small businesses to get loans and a decline in migration to New Mexico are all potential factors, Mitchell said.
But perhaps most troubling, he said, is the idea that New Mexico’s economy changed in the recession and won’t fully bounce back. People with college degrees and people in their late 20s and early 30s appear to be leaving the state, he said.
By contrast, among the states gaining people are Texas, Colorado, Arizona and California — places with large metropolitan areas, he said.
Decades of under-performance and under-investment in New Mexico’s schools as the economy shifts to knowledge and skill-based jobs may also be coming to a head now, Mitchell said.
But it’s “far too lazy of an analysis” to blame one gubernatorial administration or another, he said.
There are, nonetheless, some good signs for now. The economy is improving — underscored by the number of oil rigs operating in the state, Mitchell said.
The number of rigs fell to 13 about a year ago but has now climbed to 58. That’s “not bad,” he said, but nowhere near the number at New Mexico’s peak.
“The trend is definitely positive,” Mitchell said. “… I think we’ve seen the bottom.”