New Mexico 2007 Economic Report

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The New Mexico Bureau of Business and Economic Research gave its state of New Mexico report yesterday and it wasn't all bad. Larry Waldman, senior economist at the University, said the New Mexico economy is walking, and not running as it was in 2006.

New Mexico's economic growth though slower than 2006 and previous years, is still outperforming the national economy.

Reasons for the less-than-stellar performance of the economy are to be found in the construction, mining, and manufacturing industries. The construction industry grew in the third quarter of 2006 but slowed in the third quarter of 2007. Fewer new housing permits were issued, and demand for materials like cement and steel drove up building costs.

Two thousand seven saw a reversal in the robust manufacturing growth of 2006. Several New Mexico's manufacturers reduced their labor force - Intel Corp., http://www.intel.com/ Eclipse Aviation, http://www.eclipseaviation.com/, Advent Solar, http://www.adventsolar.com/, %20andand Millennium Transit, http://www.answers.com/topic/millennium-transit-services among others. According to the conference report, mining industry revenue also declined.

With these adverse changes, one would expect the unemployment rate to rise and it did. But the state of New Mexico's unemployment rate remains lower than the national average because despite job losses in some sectors of the economy, the state had a net gain of several thousand jobs.

Other sectors absorbed the unemployed. New Mexico's growing film industry, new small businesses (providers of 80% of state employment) health care, and the government sector picked up the slack.

What does all of the above have to do with real estate? The report is highly relevant to the real estate industry. People without jobs, and therefore without income, are unlikely consumers (buyers) and sellers need buyers.

Consequently, the real estate industry in New Mexico can take heart. Although the report was not as optimistic as last year's, it is not as pessimistic as it could be. New Mexico's economic outlook is cheerier than thenational outlook overall, which may account for the real estate industry's performance here also being somewhat cheerier than that of the national. As we have said in these posts before, in real estate we keep our sights on the economy and remember that real estate is always local. After all is said and done, we keep working and tryto see the glass as half full rather than half empty.