Corn Situation and Outlook Historical Perspective and Outlook for 2008.
New Mexico’s Economy: Current Situation and Outlook
Transcript of New Mexico’s Economy: Current Situation and Outlook
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P R E S E N T E D TO T H E 2 1 S T A N N U A L N M D ATA U S E R S C O N F E R E N C E
J E F F M I T C H E L L , B B E R D I R E C TO R
N O V E M B E R 1 4 , 2 0 1 9
New Mexico’s Economy:
Current Situation and Outlook
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New Mexico Current Economic Situation
o In 2019Q1, New Mexico added 11,000 jobs (1.4%), in line with 2018 growth.
o Nearly half of the jobs were in Eddy & Lea counties (5,250 jobs, 6.5%), tied to oil & gas.
o Metro areas (except Farmington) also added jobs, giving some balance.
o Preliminary CES data indicate faster growth in Q2 (1.7%) and Q3 (2.2%).
FOR-UNM is more cautious (1.5% and 1.6%).
o Total personal income playing catch up – +5.9% in Q2 (9th among states).
o State government recurring revenues +16.3% in FY19 (35% since FY17);
more than 60% of the increase is directly due to oil & gas boom.
o Yet, data indicates growth in oil production is slowing – Q2 up just 0.4% (QoQ).
o Next phase of the oil boom shifts from production to State government.
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Job Growth and State Rank, by Industry (CES)
BLS CES
Growth y/y Rank Growth y/y Rank Growth y/y Rank
Total Nonfarm 0.6% 43 1.3% 20 1.6% 15
Total Private 1.1% 41 1.8% 16 2.0% 13
Mining -18.0% 38 17.0% 3 10.1% 1
Construction 4.6% 30 3.6% 41 5.6% 12
Manufacturing -4.9% 48 2.3% 41 0.6% 36
Wholesale Trade -2.3% 42 0.0% 35 -3.0% 51
Retail Trade -2.4% 48 0.0% 13 -1.5% 39
Transportaion & Utilities -0.7% 43 4.0% 9 1.8% 36
Financial Activities 1.9% 33 0.7% 27 1.1% 20
Professional & Business Services 4.6% 13 1.9% 30 2.1% 17
Education & Health Services 4.2% 27 0.6% 25 1.8% 27
Leisure & Hospitality 3.5% 39 1.8% 17 4.9% 2
Total Government -0.9% 48 -0.5% 46 0.4% 29
Local Government -0.8% 46 0.1% 18 1.4% 7
State Government -1.8% 41 -1.1% 46 -1.9% 47
Federal Government 0.2% 47 -1.4% 42 0.9% 31
2018 20192017
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Source: BLS QCEW
Job Gains/Losses, by Region, 2019Q1
Oil & gas-related
employment grew by 12.8%,
and accounted for half of
new jobs statewide.
Employment in sectors other
than oil & gas-related grew
by 1.0% (vs. 1.5%).
Mining (2,651)
Total=10,873
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Labor Force by Region, 2012 – 2019Q3
Source: BLS Local Area Unemployment Statistics (LAUS)
o Lea & Eddy account for
7% of NM labor force,
but much of the year-
over-year volatility.
o FOR-UNM expects
significant downward
revisions for 2019 – note
change in ‘Rest’. -2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
(15,000)
(10,000)
(5,000)
0
5,000
10,000
15,000
20,000
25,000
30,000
Year
-ove
r-Ye
ar S
tate
wid
e G
row
th
Gai
n /
Lo
ss in
Lab
or
Forc
e
Albuquerque MSA Santa Fe MSA Farmington MSALas Cruces MSA Lea & Eddy Counties RestStatewide (Right)
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NM Consensus Revenue Estimation Group (CREG)
Gain/Loss in General Fund Accruals, FY 2019 (preliminary)
$290
$23
$11
$125
$17
($69)
($9)
$140
$603
$9
$5
($100) $0 $100 $200 $300 $400 $500 $600 $700
Gross Receipts
Compensating Tax
Selective Sales *
Personal Income Tax
Corporate Income Tax
Mineral Production Taxes
License Fees
Investment Income
Rents & Royalties
Tribal Revenue Sharing
Misc. Receipts
Millions $
12%
40%
2%
8%
16%
-14%
-15%
18%
89%
13%
11%
-25% 0% 25% 50% 75% 100%
Change YoY %
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NM TRD
Gain/Loss in Gross Taxes by County, FY19 v FY18
($25) $0 $25 $50 $75 $100 $125
Bernalillo (ABQ)
Chaves
Curry
Dona Ana
Eddy
Lea
Los Alamos
McKinley
Otero
San Juan
Sandoval (ABQ)
Santa Fe
Taos
Valencia (ABQ)
Unclassified
Others (20 Counties)
Millions $
-10% 0% 10% 20% 30% 40% 50%
% Change
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Change in Personal Income, by Component, 2013-2019 Q2
Bureau of Economic Analysis
-3%
0%
3%
6%
9%
($2,000)
$0
$2,000
$4,000
$6,000
$8,000
2013 2014 2015 2016 2017 2018 2019
% C
han
ge (
Year
-ove
r-Ye
ar)
Year
-Ove
r-Ye
ar G
ain
/Lo
ss (
Mill
ion
s $
)
Private W&S Disbursements Government W&S DisbursementsDividends/Interest/Rent Transfer PaymentsNonfarm Proprietors' Income Farm Proprietors' IncomeOther Labor Income Social Security minus Residence Adjustment
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New Mexico’s Share of US Oil Production & Active Rigs
EIA, Baker Hughes
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
11%
12%
13%
14%
2011 2012 2013 2014 2015 2016 2017 2018 2019
$0
$20
$40
$60
$80
$100
$120
New
Mex
ico
sh
are
of
US
Tota
l
$/B
arre
l
Oil Price (WTI) Drill Rigs (NM/US) Oil Production (NM/US)
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Oil Rigs, Production + Price
ONGARD, EIA, Baker Hughes
0
20
40
60
80
100
120
0
5,000
10,000
15,000
20,000
25,000
30,000
Dri
ll R
igs
/ $
Bar
rel
Tho
usa
nd
s o
f B
arre
ls
Crude Oil Production (Right) Oil Price (WTI) Drill Rigs
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New Mexico Outlook
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New Mexico Economic Outlook 2020-2024
o Forecast 12,100 jobs (1.5%) in 2019, 13,850 jobs (1.7%) in 2020; 9,600 (1.1%); average 6,850 jobs
(1.0%) thereafter. Forecast is mostly unchanged through 2021 but slightly weaker thereafter.
o Growth dynamic begins to shift in 2020 and slows beginning 2021 –
o Investments in oil & gas in Eddy & Lea Counties slow.
o FY20 & 21 State spending supports growth statewide – construction, schools, and State government.
o Sustained and broader metro growth will depend more on PBS and leisure & hospitality.
o Personal income growth takes a hit in 2020 (3.8%) due to final shift of ACA-Medicaid obligations to State.
o Growth of oil production slows – after 120% in 3 years (147 mb in 2016 to estimated 323 mb in 2019),
production growth slows to 11% in 2020 and average of 4% thereafter; reaching 415 million in 2024.
o Probability and impact of pessimistic scenario (35%) substantially outweighs optimistic scenario (10%).
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Forecast Job Growth by Sector, 2020-2024
BBER FOR-UNM, October 2019
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Job Gains/Losses by Region, 2020-2024
BBER FOR-UNM, October 2019
(2,000)
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
2019 2020 2021 2022 2023 2024
Albuquerque MSA Farmington MSA Las Cruces MSA Santa Fe MSA NonMetro
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NM Employment Forecast, Alternative Scenarios
BBER FOR-UNM, October 2019
-0.5%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
2018Q1 2019Q1 2020Q1 2021Q1 2022Q1 2023Q1 2024Q1
Baseline Scenario Pessimistic Scenario Optimistic Scenario
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ECONOMIC FORECAST DATA DASHBOARDS RESEARCH DATA BANK