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Apartment Articles

"Market Forecast '99 - Employment"

Originally appeared inNM Apartment Report
1999 NEW MEXICO ECONOMIC OUTLOOK - EXECUTIVE SUMMARY The New Mexico economy boomed in the 1993-1995 time period, caused by an expansion of high tech manufacturing, telecommunication services, and a surge in construction activity. Employment growth had reached 5.0%, and New Mexico was one of the leading states in terms of job creation. The state's economy has slowed since then, with job growth at a steady, but modest 2.0% pace for the last two and a half years. New Mexico is currently growing less than the national economy as well as other states in the Mountain West. Intel's new Fab 11 was completed by the end of 1995, and this $2.0 billion project had involved 3,500 construction workers and 2,000 new manufacturing jobs. However, other factors have played a role in New Mexico's slowdown including a poor tourism year in 1996, downsizing at the state's national laboratories and military reservations, and consolidation and mergers within the banking industry. In 1998 New Mexico's economy caught a bit of the Asian flu. Intel, Philips Semiconductor, and Sumitomo suspended expansion plans and instead reduced their collective work forces by 1,300 in the Albuquerque region. The strong dollar and international competition took their toll on the state's textile industry, as Levi Strauss closed two plants--one in Albuquerque and the other in Roswell laying off 1,100 workers. Sara Lee also closed a panty hose factory in Las Cruces which had employed 360 workers. And the weak Japanese economy was blamed for the closing of the Fulcrum Direct mail order retailer in Rio Rancho. Weak commodity prices as a result of the Asian financial crisis have also hurt the New Mexico oil and copper industries. Non-agricultural employment growth is expected to reach only 1.7% for all of 1998 before increasing to 2.3% in 1999 and 2.4% in 2000. New Mexico personal income growth will also be subdued, with anticipated gains of 4.9% this year, 5.6% next year, and 6.5% in 2000. The primary job producing sector will be services, which will enjoy annual growth averaging 3.0%. Sun Healthcare, an international operator of nursing homes headquartered in Albuquerque, will be expanding and adding 1,000 new jobs over the next three years. With the advent of non--Indian gaming within the state, two former rack tracks--one in Farmington and the other in Raton--are expected to re-open as racetrack/casino combinations in early 1999. NationsBank/Bank of America and Sprint PCS both are opening call centers in Rio Rancho in the second half of 1998 and will each employ up to 1,000 workers. Three new manufactured housing facilities have recently opened and are expected to expand employment in 1999. Allied Signal recently purchased the former Levi Strauss plant in Albuquerque and will produce gas turbine electric generators, and Emcore will manufacture photovoltaic batteries for satellites at a facility now under construction in Albuquerque. Thus, after a small employment decline in 1998, New Mexico manufacturing is expected to increase 3.1% in both 1999 and 2000. Federal highway spending is expected to boost the state's construction industry, and further defense downsizing is expected at Cannon AFB in Clovis and Holloman AFB in Alamogordo. However, foreign military operations by the German and Singapore Air Forces will pick up some of the slack. The 1999 NM Economic Forecast was written by: Brian McDonald, Director - Bureau of Business and Economic Research - University of New Mexico - 505.277.2216- bmcd@unm.edu

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by Todd Clarke CCIM (www.nmcomreal.com/nmcomreal)
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