Economists Says NM Picture Brighter Than Other Oil States

Pictured are the oil fields with pump jacks scattered throughout the area of Loco Hills, which is located between Artesia and Hobbs.
Albuquerque New Mexico(Roberto E. Rosales/Albuquerque Journal)
ALBUQUERQUE, N.M. — While one report says New Mexico is among three states at risk of recession, an Albuquerque economist disagrees and says New Mexico is in better shape than other areas hit by the ongoing drop in oil and gas prices.
State economic performance indexes tracked by Moody’s Analytics show that New Mexico, Louisiana and Oklahoma are potentially facing prolonged declines and risk sliding into a recession, according to Bloomberg Business.
The news outlet said that as economists size up the chances of the first nationwide slump since 2009, pockets of the country already have been contracting. It said Alaska, North Dakota, West Virginia and Wyoming have hit recession mode.
The regions suffering the most are in the flop stage of the energy industry’s boom-to-bust cycle, and manufacturing-dependent areas hurt by a rising dollar are at risk of receding.
Job gains and losses are key factors the National Bureau of Economic Research uses to chart U.S. expansions and recessions.
New Mexico’s seasonally adjusted unemployment rate of 6.7 percent in December and January was highest in the nation. And New Mexico’s Permian Basin in the southeast and the San Juan Basin in the northwest have, indeed, been hit hard by the crash in oil and gas prices, with at least 6,000 people estimated to have lost their jobs in those areas as of last fall. In addition, a sharp decline in state revenue has significantly impacted the state budget.
But jobs continue to grow, albeit slowly, in other parts of the state, said Jeffrey Mitchell, director of the University of New Mexico’s Bureau of Business and Economic Research.
“The recovery has been weak in general, but we saw some significant improvement in 2014 and early 2015,” Mitchell said. “Growth has slowed since then, but I certainly wouldn’t describe it as recession.”
That’s particularly true in the greater Albuquerque area, which accounts for about 45 percent of all jobs in New Mexico.
“The economy in Albuquerque is not tied closely to oil and gas, and that’s where we’re seeing the strongest employment growth,” Mitchell told the Journal. “To be sure, the Permian and San Juan basins are disproportionately impacted, and the cuts in revenue have hurt the state budget, but I wouldn’t say it pushed us into negative territory.”
By: Journal Staff (Albuquerque Journal)
Click here to view source article.