Economic expansion in the U.S. economy slowed during the second quarter of 2004, but in New Mexico, expansion speeded up during the second quarter. Nonagricultural employment growth, the primary indicator of economic expansion at the state level, increased to 2 percent in the second quarter from 1.3 percent in the first quarter.
Other indicators of economic performance, including personal income growth (up 7 percent in the first quarter of the year) and the rate of unemployment (down to 5.5 percent in the second quarter of the year), suggest that the New Mexico economy is doing quite well at the moment.
In fact, the New Mexico economy has performed admirably during the last three years, averaging 1.3 percent quarterly (year-over-year) employment growth during that period, while the U. S. economy averaged –0.5 percent employment growth for the same period.
New Mexico was one of the few states that avoided slipping into recession in the post-9/11 period. The New Mexico economy managed to remain well above ground while the economies of most other states slipped into the depths because the state was lucky enough to receive strong employment growth from several sources, including expansion at Los Alamos and Sandia National Labs, Indian gaming/entertainment/resort activities, health care and social assistance, particularly home health care and oil, and gas exploration/drilling.
Plus, New Mexico did not experience budget deficit problems as did most other states. Even though New Mexico shared some areas of weakness with the national economy, like manufacturing, the positive far outweighed the negative, and its economy stayed afloat.
The economic outlook for the New Mexico also is good, though not exceptional. Following 1.2 percent gains in both 2002 and 2003, nonagricultural employment growth will increase to 1.9 percent in 2004 and 2.3 percent in 2005. As has been the case for several years, the health care and social assistance industry will be a major provider of new jobs during the next couple of years.
In addition, the construction sector will continue to exhibit solid growth, manufacturing will return as a significant source of strength, and the government sector will exhibit moderate but consistent gains. Overall, the New Mexico economy is looking good in the near term, and will probably continue to out-perform the national economy.
For readers interested in keeping tabs on the New Mexico economy, the Bureau of Business and Economic Research at UNM has two publications available by subscription, a monthly summary of recent economic trends and a quarterly economic forecasting newsletter.
Further information can be obtained by calling BBER’s Larry Waldman at 277-7077 or via e-mail at lwaldman@unm.edu.
Contacts: Larry Waldman, (505) 277- 7077; Steve Carr, (505) 277-1821
Posted by scarr at September 29, 2004 12:20 PM