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Netflix recently expanded its studio in Albuquerque, and the Land of Enchantment’s place on the big and small screens has made the state famous around the globe.
A New Mexico Film Office study found that a state tax credit for the film industry generated an estimated $3.8 billion in total economic output in New Mexico from fiscal year 2020 to fiscal year 2023.
However, a Legislative Finance Committee report in fiscal year 2022 found film incentives were nearly 10 times greater than the next-biggest economic development tax incentive, and film incentives were twice as large as all other economic development tax incentives combined.
The report also said that in the next five years, tax expenditures through the Film Production Tax Credit could grow by 171%, increasing from $100.2 million in fiscal year 2023 to $272.1 million by fiscal year 2028.
The outdoor recreation economy in New Mexico last year accounted for 1.9%, or $2.4 billion, of the state’s gross domestic product. Employment in the state — which includes a mix of full-time, part-time, seasonal and temporary jobs — grew by 7% to roughly 28,000.
New Mexico is also in the middle of ongoing national efforts to “re-shore” chip production and other types of advanced manufacturing to decrease dependence on Asian counties, where most chips are now made, especially given the supply-chain problems caused by the global pandemic. Intel this year opened up Fab 9, a chip manufacturing facility in Rio Rancho that required a $3.5 billion investment.
Reliance on government
USA Facts, which compiles financial information from numerous sources, said that in the third quarter of 2023 the real GDP for New Mexico was $130.3 billion in goods and services, which marked a 5.7% increase per year from the previous quarter. That ranked New Mexico 13th in the country in terms of how fast its economy was growing.
During that same quarter, New Mexico’s GDP accounted for 0.47% of the total U.S. GDP, making New Mexico the 14th-smallest economy in the country, according to USA Facts.
The same organization found New Mexico is one of the state’s that is most reliant on the federal government, which is the source for about 30% of the state’s total revenue.
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Part of that is because the state’s national laboratories are major employers. New Mexico is home to Los Alamos National Laboratory, Sandia National Laboratories and two Air Force Research Laboratory directorates. Rob Black, the president and CEO of the New Mexico Chamber of Commerce, said the Brackish Groundwater National Desalination Research Facility in Alamogordo could also be considered a national laboratory.
“I lean toward that being a positive,” Black said. “Those are all things that we get to draw from that really give us a unique, competitive space. Part of how that drives (the economy) for example, New Mexico (Institute of Mining and Technology) has a cybersecurity program that is really second-to-none. ... Because there’s a national security component that ties directly back to those labs.”
Mark Benak, the chair of the Sandia Foundation who completed a Harvard Leadership Initiative where he researched New Mexico’s economy, said the state needs to find ways to collaborate between industry associations, accelerators and incubators, among other economic drivers.
Benak moved to Albuquerque 30 years ago to help start a company with a CEO who was leveraging intellectual property from a partnership between Sandia and the University of New Mexico.
“I hadn’t appreciated that until much later,” he said. “. ... It was sort of an interesting mix of academic and national lab, as well as private sector.”
Exports
New Mexico is exporting significantly more goods than it was a decade ago.
In 2023, New Mexico exports were valued at $4.9 billion, which marked an 81% increase from 2013. Exports accounted for 3.8% of the state’s GDP, according to the Office of the U.S. Trade Representative.
The state’s largest export market was Mexico, which received 70% of the New Mexico’s goods, according to the trade representative’s office.
New Mexico’s main exports were parts and accessories of data processing, aircraft parts and semiconductor media, according to the Observatory of Economic Complexity.
