A federal economist is predicting that New Mexico’s economy will expand at a modest pace in the coming year.
“It’s more optimistic than it was a year ago,” said Alison Felix, vice president and Denver Branch executive at the Federal Reserve Bank of Kansas City. “The state is better positioned than it has been in the past, and several sectors are showing improvement.”
One of those sectors is construction, which Felix said is gaining momentum in Santa Fe and especially Las Cruces. Single-family home construction appears to have grown “quite a bit” in the state over the past few months, she said.
Coming Monday: Other economists weigh in on 2018
Also picking up is the leisure, hospitality and tourism industry, which has seen growth across the country due to strong consumer confidence. That bodes well for New Mexico, which Felix categorized as a “tourism-heavy” state.
Much of New Mexico’s economy is tied to oil prices, which are currently hovering around $60 a barrel. Felix said a recent industry survey showed that producers expect to turn a profit when prices hit $51 a barrel. And while she said it’s difficult to predict what will happen with prices throughout 2018, it’s possible they could increase because of international developments.
“A market disruption in Iran or Venezuela could change things,” she said.
Employment in the mining industry, which includes oil and gas, began to rally in the first half of 2017 and then began to level off. Felix said she expects a slight uptick in oil industry jobs for 2018, as well as employment generally in New Mexico.
One sector that appears to be struggling as it relates to jobs: state and local government. That’s directly related to the state’s finances, said Felix, which have only recently recovered thanks to the oil industry’s rebound.
She also noted that, on average, New Mexico is still seeing net migration out of the state. The most recent U.S. Census figures show a net migration rate of -.2 percent in 2017, meaning more people are leaving New Mexico than moving here.
Still, Felix said, businesses here appear to be more hopeful about their future in New Mexico than they have in recent years.
“Overall, it’s looking better,” she said.
By: Marie C. Baca (ABQ Journal)
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