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Thank you to all who attended Tuesday’s Business on the Border Luncheon where Dr. Chris Erickson from NMSU provided his economic outlook and forecast for Las Cruces and the region. Dr. Erickson presented employment information illustrating that although Las Cruces has fared better than both the national average and New Mexico as a whole, in terms of employment growth, we are still behind our peak employment numbers experienced in the mid 2000’s. Dr. Erickson stated that it will take approximately three years to catch back up to those previously experienced levels. Dr. Ericson also commented that although it appears that the country as a whole is moving out of the current recession, which has lasted a staggering 20 months, we must nevertheless not rule out the possibility of a double dip recession. If you are interested in a copy of Dr. Erickson’s presentation, it can be downloaded by clicking the graphic.
From an economic development perspective we enter the new fiscal year cautiously optimistic. Over the past fiscal year, MVEDA has developed over 100 leads and over 45 initial site visits. We also carry forward a strong pipeline of projects which we believe have a strong chance of closing in the coming fiscal year. We are also experiencing much more diversification amongst the types of industries that have expressed interest in the region. MVEDA’s top 10 active prospects include 3 manufacturing companies, 2 aerospace companies, 2 renewable energy companies, one food processing company as well as one high tech company. Together these 10 prospects potentially could create the need for over 2,000,000sf of space and create as many as 600 to 700 jobs.
We are also beginning to see some recurring themes in terms of the anecdotal data we pull from prospects. For example, whereas over the past fiscal year it appeared financing was the leading driving indicator of a business’ locate decision; we are now seeing more inquiries once again surrounding work force needs. Additionally we are receiving more inquiries for build-to-suit opportunities as opposed to existing inventory. Both questions lead us to believe that access to capital is slowly becoming more available which should bode well for economic development initiatives.
This past fiscal year, we also showed success in developing opportunities within the rural areas of the County. MVEDA conducted site visits to Hatch, Rincon, Anthony, Chaparral, Santa Teresa and Sunland Park amongst other locations. We are proud to say that one of these actually led to the “locate” of Universal Plastics in Anthony, NM.
Although optimistic, we cannot lose sight that there is still much to do to spark economic development within the state and region. The MVEDA Board of Directors and staff met last week to outline our strategic plans for the new fiscal year. At the session, MVEDA updated its regional economic development SWOT analysis and recognized that although we have been successful in addressing many of our economic development weaknesses, there are several new arising threats and barriers that we must be aware of. They include:
- Uncertainty of a new administration: A new administration always puts pause in private sector decision making. Will the next administration be business friendly?
- Uncertainty of business attraction incentives: Recently the State has been experiencing budgetary challenges with its most “tried and true” incentive; Job Training Incentive Program (JTIP). Recent changes have lowered the reimbursable amount on JTIP funding in urban areas (ie…Las Cruces) from 50% to 30%. Incentives such as JTIP are the only tools most economic development programs across New Mexico have to be competitive in business attraction. Will they be further reduced?
- Regional and Local Incentives: Serious consideration needs to be placed into the development of localized incentives for economic development. Communities throughout the country, especially in Texas have economic development funds by which they can tap into for job creation.
- Border competitiveness: Recently El Paso announced the acquisition of 1,000 acres of land in Tornillo for the development of an industrial park with a port of entry which they will break ground on in 2012. How will this affect our port of entry and future economic development opportunities in Santa Teresa?
These are challenges that MVEDA recognizes and, as an organization, must consistently retool our marketing efforts and plan strategically to deal with new challenges that arise. And we can only hope that a “double dip” by the national economy is avoidable.
I look forward to seeing everyone at our next Business on the Border Luncheon where MVEDA will be providing a year end re-cap. We will also have a guest speaker from the New Mexico Small Business Assistance Program which is a program that leverages technology and expertise at our National Laboratories and can provide up to $20,000 in technical support to companies in the region.
