Updated: January 05, 2021 10:22 PM
Created: January 05, 2021 09:57 PM
ALBUQUERQUE, N.M. — New Mexico’s economy is in rough shape, along with the rest of the country.
UNM finance professor Reilly White gave insight into how damaged it is and how long will it take the state to recover.
He pointed out that our unemployment rate remains high—above 7%.
“Leisure and hospitality particularly in the state of New Mexico has been hit unbelievably hard. That sector is about 20% smaller in terms of employment,” White said.
That’s about 20,000 jobs lost.
Hundreds of restaurants have closed in the state as well, leaving thousands more out of work.
“Across eastern New Mexico they have a different set of issues involving the oil and gas industry. Employment there is down 26%,” White said.
Our state’s economic health will be closely linked to how fast the oil and gas industry can recover.
White says New Mexico’s recovery overall is going to be challenging.
“Even though some things are looking very good, it’s going to be one, two, three years out before we look like we did a year ago today,” he said.
The state had to recover from the 2008 recession, and although the circumstances were different, one takeaway is that unlike other states New Mexico isn’t home to a bunch of huge companies.
“During the tech bubble, we saw huge rounds of layoffs in Silicon Valley. Those were quickly rebuilt and rehired. In New Mexico, jobs are lost less quickly, but they’re also recovered less quickly,” White said. “These last recessions have shown that it takes a long time for New Mexico to recover."
Though the state is not doing any worse than the nation overall right now, White says.
The state agencies that put together New Mexico’s economic forecast say it’s improving. A Department of Finance and Administration spokesperson said in a statement:
“We are cautiously optimistic yet positive moving into FY22, and considering the past year, this is an excellent place to be. The state is in a much better position than we predicted in the summer.”
White added, “I think, looking ahead, we’re going to see some bounce back. At the end of the year we won’t be where we were a year ago, but we’ll be better than now, and I think that’s promising.”
White says some companies and investors that are doing okay right now have been waiting to invest until everything opens back up, so that could bring a wave of progress later this year.
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