Wednesday, January 9, 2013

NM Performance Reports Summarized: The Ugly Truth

The information that follows is taken from Harold Morgan's newspaper columns written in late 2012 and early 2013. The columns are syndicated to ten newspapers around New Mexico. The papers are in Raton, Farmington, Gallup, Espanola, Los Alamos, Socorro, Ruidoso, Roswell, Artesia and Hobbs.
Report methods vary. Specific ranks vary. But overall, we are low. Consistency counts. The public response remains the banal and conventional bemoaning of federal "dependence." To borrow Heather Wilson's elegant phrase, that's just stupid. Points missed include the huge variety of federal work, the crucial and unique nature of the key institutions, large and small, and, for me, the "dependence" metaphor, as if we stand passively.
The local media response was to whine about the quality of the statistics. Talk about missing the point….
Chief Executive Magazine
We rank 33rd in the 2012 survey of 650 business leaders by Chief Executive Magazine. Geographically we are between Texas and Arizona, respectively first and tenth in the survey. (See On the map New Mexico gains attention in a subtle way; we are one of two states between the left (er, west) coast and the Mississippi River to place below 31st in the CEO estimation. Minnesota is the other.
CNBC Top States for Business
We tied Kentucky at 36. CNBC uses 43 measures of competitiveness gathered into ten categories weighted according to state use in economic development marketing material. The categories are weighted. Cost of doing business, workforce and quality of life share the highest possible totals, closely followed by infrastructure and economy. Education, technology and business friendliness are well behind.
For eight categories, New Mexico’s rank isn’t awful, ranging from 13 for infrastructure and transportation and 15 for the economy to 31 for cost of business and 32 for the technology and innovation.
Our performance in two lighter weighted categories pulls down New Mexico’s overall rank. We are 46th for education and 47th for business friendliness. Idaho, Arizona and Nevada are below us in education. Following us in business friendliness are those landmarks of regulatory disaster, New Jersey, Rhode Island, and New York.
Brookings Institution
The Brookings Institution Metro Monitor only considers Albuquerque But the use of location quotients offers statewide insight given that Albuquerque plus Santa Fe are half the state. Location quotients compare the given area’s concentration of employment in an industry to the national average. For the third quarter of 2012, Albuquerque’s government and construction employment were well above the nation. Excellent reasons exist for some of the extra government such as research by military personnel on Kirtland Air Force Base. That construction remains with higher than average employment, even after years of declines, suggests further reduction.
Albuquerque manufacturing employment is about half the national average. Not good. The proportion of manufacturing employment has dropped 40 percent since 2000, while government (public administration) is up 40 percent. Ugly., Best States for Business and Careers
Forbes mechanism is its Scorecard for Business Climates.
Forbes says, “New Mexico took the biggest tumble, down 11 spots to No. 43 as its current economic climate and growth prospects declined relative to the rest of the country from last year.”
The Scorecard groups 35 data points into six categories. For only one category are we in the top half. It is growth prospects, oddly enough, where we are 22nd. For four categories we average a mediocre 31st place—labor supply, business costs, economic climate and regulatory environment. The quality of life category where we are 49th pulls us into the lower ten.
Employment: Lea and Eddy Counties
The following year-over-year numbers all apply to the time between November 2011 and November 2012. Except for numbers from Lea and Eddy counties, the numbers are for wage jobs.
New Mexico lost 4,800 jobs for the year, all the losses from government. Nothing happened in terms of net job production in the private sector, where there are 611,200 jobs. State government lost 4,300 jobs, the feds 1,200, and local government added 700. (These numbers come from the Department of Workforce Services, not the state personnel office.)
The combined Albuquerque/Santa Fe state government job total remained 35,700, or two thirds of sector employment. A year ago state government showed 60,800 jobs, about half in education, with 25,100 outside the north central Rio Grande corridor. Now the outside-Albuquerque-Santa Fe total is 20,800, a 17 percent drop. Education jobs grew slightly, meaning that all the losses came in non-education jobs.
Three of the four metro areas lost 7,600 jobs together, led by Albuquerque, down 3,900. Though Albuquerque did maintain state government jobs, the feds and local government combined to lose 1,000 jobs. More significantly, 2,900 private sector jobs left the four-county Albuquerque metro.
For the Las Cruces metro (Dona Ana County), 2012 was economically awful. Total jobs dropped 2,500, or 3.5 percent, with 1,800 private sector jobs gone.
Throw in Farmington’s loss of 800 private sector jobs and the three metro areas lost 5,500 private jobs. That means the private sector in the 26 rural counties and Santa Fe gained 5,500 private sector jobs. Santa Fe did its part with 800 more private jobs, including 500 in leisure and hospitality.
The real private sector heroes are in Lea and Eddy counties where, together, employment grew by 3,910. (A different number from wage jobs, “employment” includes government. It is the only recent county-level number and close enough for our purposes here.)
Employment in Lea-Eddy grew 3,190 during the year. That’s a 6.9 percent expansion. Call it a boom. Together the two counties employ 60,770, ahead of metro Farmington. Lea County alone has the largest rural county employment with 30,720 in November. Eddy County was just behind at 30,050.
From the Bureau of the Census, our population was 2,085,538 as of July 1, 2012. During the year from July 1, 2011, to July 1, 2012, a net of 7,577 people moved to elsewhere in the United States. (The figure comes from subtracting the number leaving from those coming.)
Only 2,328 (again a net figure) came moved here from outside the United States. Combine the two and we get what the Census geeks call “net negative migration” was 5,229 for the year. We have Harding County on a statewide scale.
“Death Spiral States”
We lead a group of eleven states called “death spiral states” by
“Death spiral” is harsh. So is the “taker/maker” distinction employed in the post by staffer William Baldwin, who says, “A taker is someone who draws money from (state or local) government, as an employee, pensioner or welfare recipient. A maker is someone gainfully employed in the private sector.” To make the spiral list, a state needs more takers than makers and to be in the lower half of a credit analysis by Conning & Co., a money manager that measures risk in insurance company portfolios.
New Mexico has the highest taker / maker ratio at 1.53. Mississippi is second. There it is. We’re in excusive company. California, New York and Illinois are among the eleven. The future is “a rising tax burden, deteriorating state finances and an exodus of employers,” Baldwin says.

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