NMCentennialBlueBook

It is unclear, however, whether Intel intends to expand local operations in the near future. For this
sector, the forecast calls for a modest recovery in employment from its current very low levels before
returning to a relatively flat or negative trend for the long-term.
An outlook for a continuing rollback of government employment will further limit the strength of
the recovery. This forecast expects a continuing and long-term reduction in federal employment
(-2.6% employment decline in 2011), and only very slow recovery of employment by the state and
local governments (0.4% and 0.1% employment growth in 2011, respectively). Insofar as local
government is more closely tied to the demands of a growing population, the growth of employment
will be somewhat stronger, although it is unlikely to exceed 1.5% annual growth at any point during
the forecast period. Also limiting growth will be the phasing-out of approximately 400 positions in
the Albuquerque Public Schools system.
This forecast anticipates that health care & educational services and professional & business services
will be among the strongest sectors of the state’s economy. Employment in these sectors is expected
to grow by 2 to 3 percent per year. Given expected limits on Medicaid and other health-related
expenditures, it seems unlikely that health care will return to the rate of growth typical of the last
decade. However, the addition of a new hospital in Rio Rancho, the newly opened hospital in Santa
Rosa and the continuing demand for health care services, employment is likely to stay robust in that
sector.
While employment in professional & business services may not achieve rates common in earlier
periods, it will grow at a faster pace than the State economy (2.3% employment growth for
professional & business services in 2011 compared to 0.8% total employment growth). The nature of
this increase is due partly to the fact that professional & business services must grow more quickly
to accommodate aggregate demand from all the other sectors, even if each individual sector grows
relatively
slowly. However, the expected loss of approximately 370 jobs at the J.C. Penny call center in Rio
Rancho by the middle of the year will likely temper growth in the short term.
In summary, the New Mexico economy has begun to recover from the deep recession of the past
years. However, with the likely continued decline in federal and state government spending and
without any single sector of the economy positioned to drive rapid growth, the recovery will be slow,
with employment increases never exceeding 1.5% per year for the foreseeable future.
Jeffrey Mitchell and Michael O’Donnell
Economists
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