LCSN: Las Cruces, El Paso dive in economic ratings

December 13, 2015. Retrieved online December 15, 2015 from Vic Kolenc, El Paso Times, Las Cruces Sun-News

[Excerpts below reprinted with permission: Read the complete Las Cruces Sun-News article]

EL PASO — The economies of Las Cruces and El Paso are performing poorly compared to many other cities across the country, according to the latest Milken Institute Best-Performing Cities rankings.

Las Cruces’ economy ranked No. 120 among 201 small metro ares, compared to No. 55 last year — one of the biggest drops on the small metros’ ranking.

El Paso’s economy ranked No. 121 on the list of 200 large metro areas, compared to No. 53 last year — one of the biggest drops among 200 large metro areas, according to the 2015 rankings released Tuesday.

The California economic research organization does the rankings annually. It measures each metro area’s economic performance by long- and short-term growth in jobs, wages, and high-tech industry output.

Jim Peach, an economist with New Mexico State University, said the numbers should be viewed with a degree of skepticism as the indices have a lot of variability from year to year.

“I wouldn’t put too much value in it for any given year,” Peach said.

In this region, El Paso ranked better than Albuquerque at No. 180 (No. 179 last year), and Tucson at No. 175 (No. 166 last year) on the big cities’ list; Phoenix ranked No. 62, compared to No. 65 last year. Santa Fe was No. 177 on the small cities’ list, compared to No. 153 last year.

Las Cruces ranked first among the small metro areas for its concentration of high-tech industries with significant output. One of the driving forces behind the transition from technology to marketplace in Las Cruces is the Arrowhead Center on the New Mexico State University campus. El Paso ranked 114th for the size of its high-tech industry among the large metro areas.

Still, NMSU’s Peach points out, while there are high-tech jobs, they are not growing and, since the industry is still in development in many ways and a small change in statistics from year to year could have a greater impact due to the smaller workforce in that industry.

“Just a small change in their definition of high tech would make a big change in the rankings,” Peach said. “These are almost like beauty contests. But they do have one thing right, Las Cruces and Doña Ana County have not been doing well. We’ve been flat on employment for a long, long time. We now have just about the same number of nonfarm payroll employees as when the recession started nationally. We are not doing well. Neither is the state as a whole.”

Peach noted that much of the local economy is heavily dependent on government spending – military, contractors, public schools and the university system.

“There are not a lot of things you can do in the short run to change that picture,” Peach said. “State and federal funding are incredibly important and those are not growth industries these days.’

Peach said the “one bright spot” in the local economy is development in and around Santa Teresa with the Union Pacific intermodal center and the following development in manufacturing that it spurred along the border.

“We would be in real trouble without it,” he said. “We’re just cruising along and not doing anything spectacular.”

The economic performance of many Texas metro areas has been hurt by the oil industry’s decline, the Milken Institute report showed.

“In the United States overall, business and consumer spending on technology products and services is a powerful force in economic growth,” the Milken report noted. “Metros involved in designing and creating these products and services are growing most rapidly.”

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