Article courtesy of the Las Cruces Bulletin
By Chris Erickson
Christopher A. Erickson, Ph.D.
Las Cruces’ per capita real Gross Domestic Product (GDP) growth ranked 10th among 366 metropolitan statistical areas, according to data released by the Bureau of Economic Analysis last week. Between 2001, when data collection began, and 2009, Las Cruces’ per capita real GDP grew by 24.3 percent, or 2.8 percent per year, more than six times faster than the national average.
Fastest growing metros were Pascagoula, Miss., which nearly doubled between 2001 and 2009, followed by Corvallis, Ore., and Casper, Wyo. Slowest growing were Burlington, N.C., Hickory-Lenoir-Morganton, N.C., and Gainesville, Ga. For all metropolitan areas combined, growth was 3.8 percent.
The other three New Mexico metros ranked by BEA performed below the national average. Albuquerque ranked 200th, seeing per capita real GDP growth of only 2.3. Santa Fe barely squeaked into positive territory with 0.5 percent growth. For New Mexico as a whole, per capita real GDP grew by 4.5 percent, buoyed by Las Cruces as well as our rural agricultural sector. El Paso grew 5.6 percent and ranked 151st.
Real GDP measures the value added within an economy in a year and is the broadest measure of economic activity, hence, is the gold standard when looking at economic performance. It is available only annually, however, and with a 13-month delay, making GDP not very useful for tracking current economic conditions.
Increased productivity per job accounts for the strong increase in Las Cruces’ metro GDP. In 2001, the average job in Las Cruces created $58,000.
Unfortunately, the data doesn’t allow us to explain why productivity increased so much. The data is by job, not by worker. It may be that job productivity increased from combining part-time jobs, or it could be from increased overtime, or it could be from improved technology that increases productivity per hour. We can’t say. But, however you slice it, the gains are impressive.
Drilling deeper, financial services and manufacturing saw the largest gains, both more than doubling. Poorest performing was hospitality and leisure, increasing only 8 percent. Next lowest was transportation and warehousing, and government was third slowest growing, which may be a surprise to local Tea Partiers.
While Las Cruces has done well since 2001, we still are a relatively low-income community. Despite rapid growth, we still rank 336th out of 366 metros in terms of absolute per capita real GDP at $23,627. But even here we are doing better. In 2001, we ranked 361st, seventh from the bottom.
If Las Cruces continues at the same pace over the next eight years has we have since 2001, local incomes will climb to near that of the national average. Achieving such an outcome will depend on continue effort in the areas of education, job growth and infrastructure investment.
Chris Erickson is an associate professor of economics at New Mexico State University. His wife is a high school science teacher and his daughter attends Mayfield High School. The views expressed here are his own and may not reflect the views of the Regents or administration of NMSU.
