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Official employment numbers for the New Mexico economy are bleak, but the reality, while far from good, may not be quite so bad, according to the Journal’s twice-yearly Economy Watch review of economic conditions.
“We’re not growing rapidly,” said Lee Reynis, director of the University of New Mexico Bureau of Business and Economic Research, which conducts the review. “I’m not even sure we’re growing at 1 percent. But in my opinion, based on everything I look at, we are definitely on the positive side.”
The state Department of Workforce Solutions reported earlier in April that New Mexico lost 1,000 jobs between March 2013 and March 2014, and the March unemployment rate increased to 7 percent from 6.7 percent a month earlier. The Albuquerque metropolitan statistical area added almost 1,400 jobs in the 12-month period, but the unemployment rate was 7.6 percent, according to DWS.
Reynis thinks recently completed, routine statistical adjustments to the nation’s jobs numbers, known as benchmarking, are probably overstating job losses in New Mexico.
“A variety of things is happening that says we have positive but slow growth,” she said.
For example, household surveys show employment grew 0.7 percent in both January and February compared with the same months a year earlier. Trends in the data over the past several months show the gap in job growth between New Mexico and the rest of the country has narrowed, Reynis added.
A sign of strength?

A line of job seekers waits to get into the recent Choice Career Fairs’ Albuquerque Career Fair at Hotel Cascada. Albuquerque and New Mexico employment numbers, while still bleak, are believed to be on the “positive side,” according to UNM economist Lee Reynis. (Albuquerque Journal File)
Rising unemployment rates even can be a sign of strength in the economy, Reynis said. Since only people who say they are looking for work are counted as unemployed, an increase in the unemployment rate absent evidence of economic decline can show that jobless workers have become more confident they can find a job and have begun looking for work again.
The household surveys that generate the unemployment numbers also reveal some disturbing things, Reynis said.
The unemployment rate in New Mexico for 2013 was 7.2 percent. However, if people who want to work but have given up trying to find work – known as marginally attached workers – are counted, the 2013 unemployment rate goes to 8.3 percent.
Add workers who want full-time jobs but can only find part-time jobs and the rate reaches 13.7 percent.
“Those numbers kind of help put things into perspective,” Reynis said. “We have a much larger problem with unemployment than we see in the (usual) numbers. That’s true at the national level. It’s true everywhere.”
Government reliance

Iron workers install rebar on March 24 for the supports of the Paseo del Norte overpass at Jefferson NE, part of the reconstruction of the I-25 and Paseo interchange. (Albuquerque Journal File)
New Mexico’s reliance on government employment goes a long way toward explaining the problem, Reynis said. Counting both workers who receive a government paycheck and those who work for firms that contract with government agencies, 32 percent of the state’s workforce relies on government spending.
“That makes us very vulnerable,” she said.
New Mexico lost 2,800 government jobs between March 2013 and March 2014, but that doesn’t count nongovernment workers whose employers rely on government spending.
“Government wage and salary disbursements growth is close to zero or negative because of what has happened to the federal government” through budget cuts, Reynis said.
The doldrums afflicting New Mexico’s economy show up in two major ways: construction and population growth.
“Our economic booms are coincident with housing booms,” she said. “Housing and construction in general should be a reflection of what’s happening in your economy. When businesses expand they require people, and people require housing.” The housing booms have stopped, Reynis said.
Population growth in 2013 “was very close to zero,” she said, largely because more people are moving out of the state than are moving in. “If you have population growth, you’re going to stimulate demand for housing and all sorts of things.”
Slowing population growth is “one of the things that will hold us down” economically, she said.
Losing educated people

Home construction in the Albuquerque metro is still struggling to recover. (Albuquerque Journal File)
Population data for 2013 are not available yet, but census data show New Mexico is losing people it can’t afford to lose. It appears a disproportionate number of educated people are leaving the state because job prospects are better elsewhere.
Of the total workforce that left New Mexico in 2013, 19 percent were employed in the professional and business services category and 18 percent were employed in the education and health services sector. Construction workers accounted for 4 percent of the workers who left New Mexico.
By: Winthrop Quigley (Albuquerque Journal)
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As the saying goes, if you can’t beat ’em—mimic ’em?
As far as convenience goes, it’s hard for physical retailers to compete with their online foes, where consumers can search for the latest products without even pausing to get dressed.
But bricks-and-mortar stores aren’t giving up. In order to better compete with their Web-only counterparts, physical stores and the malls that house them are aiming to bring the ease of online shopping to the real world, utilizing a new genre of tenants and technologies.
“What we are doing as a landlord is facilitating the bricks-and-mortar retailer to compete with an online retailer as it relates to convenience, which is, ‘Give me what I want when I want it,'” said General Growth Properties CEO Sandeep Mathrani.
The new look of today’s shopping malls
As shopping mall traffic steadily declines and major retailers such as Sears and J.C. Penney shutter stores across the U.S., mall tenants have dramatically changed over the past few years, said Jesse Tron, a spokesperson for the International Council of Shopping Centers.
In place of these customary lessees, new types of tenants—grocery stores, fitness centers and even post offices—have become mainstays at many malls across America.
But these nontraditional tenants have not only helped occupancy rates at shopping centers rebound from their post-recession lows. They also help consumers combine trips to one destination, therefore encouraging cross-shopping among the mall’s other tenants.
“If you had told a developer or landlord 15 years ago that they would be putting grocery stores or fitness centers in shopping malls, they might have looked at you sideways,” Tron said. “Not only are they doing it now, but [they] are finding success in its application.”
Rick Caruso, CEO of Caruso Affiliated, one of the country’s largest privately held real estate companies, has been including grocery stores on his properties for 20 years, he said. The Promenade at Westlake, in California, boasts upscale grocery store Bristol Farms, while The Commons at Calabasas houses a Ralphs grocery store.
A proponent of altering malls’ traditional footprints, Caruso said that anchor tenants come in all shapes and sizes—including grocery stores. He said centers need to focus on giving consumers a convenient way to shop, but also on delivering a memorable experience. One example of this is the incorporation of jazz music at Michael Mina’s Bourbon Steak restaurant at The Americana at Brand, he said.
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“The place is just packed,” he said. “It just adds another dimension to the experience on the property.”
Although Caruso remains on the sidelines about fitness centers, whose visits shoppers typically don’t combine with shopping trips the way they do with other tenants, General Growth Properties’ Mathrani said their importance lies in giving visibility to his malls.
For instance, if a consumer is used to visiting a particular shopping center for their groceries or workouts, it becomes second nature to head there when they’re looking to buy a tuxedo.
“They don’t even think about going anywhere else,” Mathrani said.
Bringing high-tech to in-store
Despite a slew of new-age tenants, convenience at retail comes down to more than just storefronts. Caruso Affiliated offers free Wi-Fi at its dozen retail properties, while General Growth Properties, which owns more than 100 shopping malls, will add this service at all its locations in May. This technology allows shoppers to easily conduct product reviews and price comparisons while in-store.
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Retail apps, such as Tanger Outlets’, offer shoppers location-based offers as they browse for bargains. Macy’s Herald Square store as well as the shopping malls at Las Vegas’ Bellagio and Venetian resorts, have teamed up with Aruba Networks’ Meridian software company to offer in-store GPS to shoppers looking for a particular department or store.
But perhaps the most important development is making it simple to shop across both the Web and the physical store. According to a recent report by the Accenture consulting firm, a growing number of U.S. shoppers plan to make purchases at bricks-and-mortar stores, but they want the experience to be more convenient.
As such, 19 percent of consumers surveyed said they are reserving items in-store or buying them online for in-store pickup, while 14 percent are buying at the store and having the item shipped to them.
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Because of these blurred lines, Gap last week said it will expand its online and offline synergies, including the ability to reserve items in-store at all domestic Gap stores. American Eagle will also debut the ability to buy online and ship from the store, while Kohl’s will grow its ability to ship Web orders from 200 to 500 stores. Wal-Mart is also testing delivery and pickup of its online grocery orders through Walmart To Go.
But these innovations are not restricted to individual retailers—developers are also getting a piece of the action. Caruso Affiliated’s The Grove property offers a free concierge service, where shoppers can call up, request an item, and have it packaged and sent to their home, free of charge.
Four major mall operators, including General Growth Properties and Simon Property Group, are incorporating—and investing—in same-day delivery service Deliv. Through the program, shopping malls fund and supply runners, who collect packages from their tenants and deliver them to shoppers for $5. Customers are able to define a delivery time window that’s most convenient for them.
The system gives bricks-and-mortar stores a “huge” advantage over Amazon, Deliv CEO Daphne Carmeli said. It positions the retailers’ physical footprints to serve thousands of distribution centers, which allows for faster and more convenient delivery options. By comparison, Amazon only has distribution centers in 14 states.
“You can see how the scale has suddenly shifted,” Carmeli said.
What’s more, Mathrani said the use of bricks-and-mortar stores more as distribution centers could have deeper implications for retailers’ profitability, as it will likely lead to better inventory management, fewer markdowns and higher margins.
“If they can actually get their online inventory and the store inventory to be transparent on a real-time basis then imagine what can happen,” he said. “We’re just on the one yard line with 99 yards to go.”
By: Krystina Gustafson (CNBC)
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