The Albuquerque metropolitan area is in the midst of a double-dip recession, the Brookings Institution reported Wednesday.
The area is dead last among the 100 largest U.S. metro areas in terms of its recovery from the recession, Brookings said.
“Albuquerque is one of the few, maybe one of the only, big metros to be in the midst of a double-dip recession,” said Brookings Research Analyst Kenan Fikri.
Brookings’ Mountain Monitor report for first-quarter economic activity was just as harsh in its assessment of the area’s nonrecovery.
“Job growth remained negative for the third straight quarter in Albuquerque as employment levels declined by 0.2 percent,” the report said. “The metro area continues to slide back towards its post-recession low-point and is now the Mountain region metro area furthest away from pre-recession peak employment in percentage terms,” it noted.
“Output contracted by 0.5 percent, the sharpest although not [the] lone pull-back in the region. Housing was a bright spot, with prices increasing by 0.9 percent over the first quarter, above the national average rate.”
The Albuquerque area had a brief recovery in early 2013 but has been losing jobs since the third quarter, Fikri said.
According to the U.S. Bureau of Labor Statistics, the metro area lost 2,700 jobs in the 12 months that ended May 31 for a negative 0.7 percent growth rate. The declines were led by heavy losses in the construction, manufacturing, and information and professional services sectors, which combined lost 4,300 jobs during the year.
As of May, the area was 7.4 percent below its jobs peak of 399,500 in December 2008, according to the BLS.
Fikri said the area’s job losses are due to weaknesses in what are called economic base sectors — those whose goods and services are exported outside the state and bring in new money to grow an economy.
“It is probably attributable to a weak trade sector; these are industries that draw in money from the outside the economy to prime local spending,” Fikri said. “The information sector is not doing well. That is Internet-related industries. And the large, professional services sector is struggling. On top of that, the public sector employment has fallen, and that is the source of strong, middle-class jobs.
“Innovation-intensive industries, manufacturing and the advanced, higher-added-value pursuits that bring revenue into an economy and keep it vital and healthy — those sectors seem to be ailing in Albuquerque,” he said.
In the last four quarters, eight industry sectors had negative job growth, the Brookings report said, and six have seen increases.
Information was down 6.9 percent, manufacturing 5.2 percent, professional and business services 2.2 percent and construction 2.1 percent, Brookings said.
Albuquerque’s non-existent recovery and double-dip recession was all the more interesting because the area wasn’t particularly hard hit by the recession, Fikri said. The area ranked 36th out of the top 100 metro areas in terms of the overall economic impact of the recession, Brookings said.
“The recession kind of passed Albuquerque by, almost, but as the national recovery gained, Albuquerque seems to be a kind of an island unto itself,” Fikri said. “It did not get battered when the national economy tanked, but it has been unable to participate in the national economic recovery.”
Fikri said the area’s bad economic news “points to the need for a serious economic development strategy to increase Albuquerque’s ties with other metro areas and diversify its company base.”
“Cities exist to be centers of exchange,” he added, “and the intensity of Albuquerque’s exchange is so low because it is dominated by two firms or industries.”
By Dennis Domrzalski (Albuquerque Business First)
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