-Staff Report
New Mexico’s economic expansion slipped a bit in the first quarter of 2001, according to a report recently released by the UNM Bureau of Business and Economic Research.
Nonagricultural employment growth, which stood at 2 percent for all of 2000, dipped to 1.7 percent in the first quarter. Personal income growth during the fourth quarter of 2000 reached 5.7 percent. The seasonally adjusted unemployment rate rose to 5.4 percent from 4.7 percent a year earlier.
Mining and construction were easily the fastest-growing employment sectors in the first quarter. Mining employment was up 9.9 percent, a hefty gain, but below the 11.8 percent increase of 2000. Metal mining dropped 6.3 percent, as a result of a layoff at the Phelps-Dodge copper mining operation in Grant County. Phelps-Dodge released 85 miners in March, and let another 40 contract workers go at the same time. Employment in oil and gas extraction continued to zoom, enjoying a 9.9 percent gain. The oil and gas sector added 2,767 jobs in the first quarter for a total of 11,267 jobs. The industry has rebounded from a low of only 8,500 jobs just two years ago. The boom has meant not only thousands of direct and indirect jobs, but also millions of dollars in tax revenues into the state’s coffers.
Construction employment exhibited a 5.3 percent gain during the first quarter, the largest quarterly increase since 1995. Much of the strong performance can be attributed to road and highway repair and construction around the state, particularly the Big-I project in Albuquerque.
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A major capital expansion at Intel and a lesser expansion at Phillips Semiconductor have also contributed to the construction employment growth.
Housing showed surprisingly strong in the first quarter, with an increase of 18.4 percent in total housing units authorized.
The manufacturing sector continued to advance at a moderate pace, posting a 1.5 percent first quarter gain in employment. The growth can be attributed to the metro areas, particularly Albuquerque, while the non-metro economy lost hundreds of manufacturing jobs during the last year. Among the losses are layoffs at the NovaBus plant in Roswell, costing 135 jobs, and the closure of White Sands Forest Products in Otero County, costing 90 jobs.
The outlook for the New Mexico economy is for rather moderate growth for the next few years. Nonagricultural employment growth is expected to reach only 1.7 percent in both 2001 and 2002.
Construction will be a major source of strength this year, but with the completion of the Big-I and Intel projects, construction activity will wane and the sector will slip into a minor contraction for the remainder of the forecast period.
Mining will also be a force this year, but will slow next year. Manufacturing will take to the high road again, and along with services, will provide a consistent impetus for growth through 2002.
The stated employment growth rates will keep New Mexico above the U.S. average, but will not stack up well against other western states. Personal income growth will fall from 5.4 percent this year to 4.9 percent in 2002. These increases will be close to the national average, but again will be below other states in the region.
For more information, call Larry Waldman at the Bureau of Business and Economic Research at 277-7077.
