new mexico’s economy: current situation and outlook · new mexico current economic situation o in...
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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
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.
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
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
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)
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 %
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
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
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)
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
New Mexico Outlook
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%).
Forecast Job Growth by Sector, 2020-2024
BBER FOR-UNM, October 2019
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
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
ECONOMIC FORECAST DATA DASHBOARDS RESEARCH DATA BANK