Southern New Mexico Economic Indicators

First quarter 2022

Las Cruces’ economy grew in February. Payroll employment has reached its pre-pandemic level, unemployment has declined and the metro real estate market has remained robust. Monthly trading volumes were below pre-pandemic levels. New Mexico’s rig count increased, although oil production fell slightly. Commodity prices have soared.

labor market

Las Cruces payroll gains ground

Employment in Las Cruces rose an annualized 11.7%, or 685 jobs, in February (Chart 1). Job gains were widespread, but particularly notable in recreation and hospitality (306 jobs), education and health services (253), manufacturing (137), professional and business services (127) and trade, transport and public services (124). Employment increases were more modest in information, financial activities, and construction and mining. Payrolls were flat in the other services sector and contracted in government, which lost 362 jobs.

Chart 1

February “Major Employment Developments” A report from the New Mexico Department of Workforce Solutions Bureau of Economic Research and Analysis estimates that approximately 1,230 jobs will be created in the southern region of New Mexico in the coming years. These jobs will be in aviation, film and television production, solar generation, manufacturing and warehousing and will be located primarily in Chaves and Doña Ana counties.

Two years into the pandemic, Las Cruces payrolls have fully recovered and increased by 90 jobs in February. Sectors that saw net job gains include trade, transportation and utilities (490 jobs), leisure and hospitality (335), manufacturing (298) and education and health services (80). Occupations in professional and business services were in line with February 2020 levels, while employment was down in government (-459 jobs), financial activities (-294), construction and mining (-121) , other services (-109) and information (-105).

Variations in the Mixed unemployment rate

The Las Cruces unemployment rate fell from 5.7% in January to 5.4% in February (Chart 2). New Mexico’s unemployment rate rose from 5.9% in January to 5.6% in February. However, southern New Mexico’s unemployment rate was 6.1% in January, down from 5.5% the previous month. Luna County’s unemployment rate remained the highest in southern New Mexico at 12.8%, while De Baca County’s rate was the lowest in the region at 3.9%.

Chart 2

housing market

Home sales in Las Cruces totaled an annualized 2,651 in January, up 4.0% from December and 7.0% from a year ago (Chart 3). The median inflation-adjusted home price in Las Cruces (based on a six-month moving average) was $271,272 in January, 2.2% higher than the previous month and up 7.9% from compared to January 2021.

Chart 3

Exchange

In February, total annualized trade primarily through the Port of Santa Teresa in southern New Mexico totaled $28.9 billion, 2.1% lower than January but up 6.7% from to February 2021, when monthly trade was $27.1 billion (Chart 4). The monthly decline was driven by a 2.6% drop in imports and a 1.4% drop in exports. Imports were $17.2 billion and exports were $11.7 billion in February.

Chart 4

Commodity markets

The number of platforms increases, production falls

The rig count in New Mexico fell from 86 in February to 91 in March (Chart 5). Meanwhile, oil production in January fell 1.8% from the previous month to 1.36 million barrels per day, but rose 23% from a year earlier.

Chart 5

Potash prices soar, copper prices edge up

Besides oil and natural gas, southern New Mexico’s economy depends on other commodities, such as potash, copper, and silver. Potash prices rose dramatically following the Russian invasion of Ukraine, ensuing sanctions and rising food prices, reaching an average of $546.62 per metric ton in March 2022. Potash prices rose 40% from February and nearly tripled from March 2021 (Chart 6). Copper prices also rose from $9,754 per metric ton in February to $10,123 in March and were up 13.8% year-over-year.

Chart 6

NOTES: Data may not match previously published figures due to revisions. All New Mexico counties in the Eleventh Federal Reserve District are counted as part of Southern New Mexico. Las Cruces is excluded from southern New Mexico to better gauge unemployment levels outside of the region’s largest population center.

About Southern New Mexico Economic Indicators

Questions can be directed to Keighton Hines at [email protected] Southern New Mexico Economic Indicators is published quarterly.