New Mexico Economic Overview
Since the 16th century, when Spanish explorers entered the region seeking gold and other precious metals, minerals have been the state’s most valuable natural resource, and New Mexico is now a national leader in the mining of uranium and potassium salts. The state is also home to important defense research facilities and exports agricultural products, but tourism is its most important industry. About half of New Mexico’s economy is based on the service sector, while the remainder focuses on mining and oil production. Government spending accounts for nearly one-fourth of the state’s economy. Principal manufacturing industries include food products, chemicals, transportation equipment, lumber, electrical machinery, and stone, clay, and glass products. More than two-thirds of New Mexico's farm income comes from livestock products, including cattle and sheep. Per capita personal income stands at $33,400, and New Mexico’s gross state product is approximately $76 billion.
New Mexico’s early settlers traded wool, furs, and horses for consumer goods, transporting them across the Santa Fe Trail. After the Civil War, gold and silver mining became more important. In 1880 the railroad reached Albuquerque, bringing new settlers who increased farming and cattle ranching. In the late 1800s health-seekers believing that the climate was conducive to healing became significant to the economy of New Mexico. Although this practice was common in the 19th century, it declined with advances in modern medicine following the First World War.
New Mexico was one of the poorest states in the nation during the 1920s. During the Great Depression it benefited from various New Deal programs to restore its economy and cultural production. Specific programs were directed to reviving arts and crafts production, as well as boosting agriculture and stock-raising.
World War II boosted the state’s economy with the establishment of military research activities. The first atomic bomb was created at the Los Alamos National Laboratory and detonated in the state in 1945. Since that time, New Mexico has been a leader in research and development of nuclear, solar, and geothermal energy. From 1940 to 1960, Santa Fe and Taos once again became resort areas for health seekers, as well as locations of second homes for the wealthy. Since the 1990s, agriculture has become an important industry; milk, sorghum, wheat, hay, chili peppers, and onions have become important agricultural products.
New Mexico’s large agriculture industry generates annual revenue of more than $3 billion. Most of this is from dairy products, which bring in $1.3 billion, while the beef industry is responsible for $951 million. Of the 1.5 million head of cattle, 340,000 are dairy cows. Farms in the state also raise more than 130,000 sheep. New Mexico exports pecans worth $70 million and more than $2.5 million worth of pinto beans, onions, and melons. Chili growers produce more than 73,000 tons of the crop a year, which are worth nearly $40 million. The cotton crop adds revenue of $38 million and onions generate sales of $63.4 million. New Mexico’s farms directly employ 24,500 workers, who take home a combined annual salary of some $600 million.
BANKING AND FINANCIAL SERVICES
The nearly 40 banks operating in New Mexico have total assets of approximately $9.4 billion. There are 34,700 workers employed in the financial industry in the state. Wages paid to all workers in credit intermediation and related activities are $532 million. Employees of securities, commodity contract, and investment firms earn combined salaries of $182 million per year. Some of the prominent banks doing business in New Mexico are Wells Fargo, National City Corporation, and Bank of America.
The Department of Information Technology maintains and operates the state's broadband digital microwave radio communication network. The department works with 168 employees throughout the state and has an annual budget of $62.8 million. The headquarters of cable television movie channel Reelz Channel is located in Albuquerque and employs approximately 100 workers. Annual salaries for telecommunications workers in New Mexico total $342.6 million. The information industry employs 16,100 workers, and their combined annual take-home pay is some $680 million. New Mexico’s broadcasting employees each earn average salaries of $40,000 per year.
As well as residential building, the construction industry in New Mexico takes on state and national projects such as rebuilding water systems, upgrading clinics, modernizing schools, and enlarging warehouses, as well as maintaining the National Laboratory Nuclear Facility in Los Alamos and the Air Force Flight Simulator Base in Kirtland. New Mexico’s approximately 59,000 construction workers earn combined annual salaries of some $2.3 billion.
Some 121,700 pupils are enrolled in New Mexico’s public schools. The 80,000 employees of the state’s education-related services earn about $253 million in annual payroll. There are 42 institutes of higher learning, of which 28 are publicly funded. Some 115,000 students are enrolled in the state’s colleges and universities, with more than 27,000 enrolled in the largest, the University of New Mexico in Albuquerque. The National Science Foundation contributes $22.3 million to the research departments of New Mexico’s institutions of higher learning. One important beneficiary is the Array Operations Center of the National Radio Astronomy Observatory in Socorro.
New Mexico is an important source of fossil fuel and renewable energy resources, and there are major coal deposits in the northwest corner of the state. Crude oil production represents just over three percent of the U.S. total. New Mexico’s Permian Basin holds three of the 100 largest oil fields in the United States, and several petroleum product pipelines connect those refineries to local markets. The state is a leader in natural gas production, and its output accounts for around one-tenth of national production. Since 1945, New Mexico has been a leader in energy research and development, with extensive experiments conducted at Los Alamos Scientific Laboratory and Sandia Laboratories in the nuclear, solar, and geothermal areas. Los Alamos National Laboratory generates more than $1 billion worth of multi-year purchase orders and subcontracts to small businesses.
With its 25 percent film production rebate, agreeable climate, and aggressive film office, New Mexico is an attractive location for movie producers. In addition to spending on film productions, New Mexico’s economy also benefits from capital investment to support the film industry’s growth in the state and additional film-related tourism. Film production activities in New Mexico create some 3,900 direct and indirect jobs. Total media industry productions generate about $674 million for the state’s economy. Other performing arts hubs include the renowned Santa Fe Opera, the Santa Fe Chamber Music Festival, and the restored Lensic Theater.
New Mexico’s insurance companies offer a full line of insurance services in locations throughout the state. There are approximately 7,900 employees working either as insurance carriers or in related activities. They earn an annual payroll of some $34 million. The estimated value of premiums paid on crop insurance is $16.6 million. Prominent New Mexico insurance companies include New Mexico Assurance Company, New Mexico Employers Assurance Company, New Mexico Premier Insurance Company, and New Mexico Mutual Casualty Company. All of these companies are based in New Mexico’s financial center, Albuquerque.
New Mexico is a center of manufacturing for more than 2,200 industries, which employ some 57,000 workers with an annual payroll of $2.7 billion. Of these, nearly 11,000 are employed in the electronics sector, 6,200 in industrial machinery, and 6,140 in food manufacturing. Most industrial employment is based in Albuquerque, which accounts for 21,227 manufacturing jobs. New Mexico exports manufactured goods worth some $2.8 billion annually. Computers and electronic products dominate exports, accounting for $1.8 billion. Other top manufactured exports are machinery products ($157 million), transportation equipment ($146 million), and processed foods ($111 million). More than one-fifth of New Mexico’s manufacturing workers depend on exports for employment.
MINING AND EXTRACTION
Oil and natural gas account for about half of the state’s income from natural resources. Most of the gold and silver produced is recovered as a by-product of copper smelting. Copper, iron ore, lead, zinc, manganese, and molybdenum are also mined. New Mexico produces more than four-fifths of the nation’s potash, is a leading producer of perlite, and is a key player in uranium production. The state is home to 204 mining operations that account for direct employment of 6,240 workers and 14,690 additional jobs related to mining activity. The annual payroll for miners totals $380 million, while the payroll for indirect economic activity from the industry is $950 million. Mining operations generate $4.2 billion worth of mineral, metal, and fuel products.
In a state where money and resources are scarce, the revenue generated through nonprofit organizations is important. New Mexico's 11,855 registered nonprofits generate annual income of $7.1 billion. Every dollar invested in a nonprofit reaps more than $157 in benefits. The actual benefits of $16.6 million donations from 14 foundations and other sources are $2.6 billion. Some of the economically important nonprofits doing business in New Mexico are the Santa Fe Living Wage Network, SouthWest Organizing Project, and New Mexico Association of Community Organizations for Reform Now. Technology Ventures Corporation is a high-tech nonprofit that brings inventors, entrepreneurs, and investors together to create high-tech companies and take laboratory inventions to the commercial market. The organization has created more than 6,200 jobs and has stimulated the investment of more than $500 million in high-tech businesses in central New Mexico.
There are numerous national retail chain establishments as well as local small businesses in New Mexico. The number of workers employed in these 9,337 retail firms is approximately 161,300. The largest sector in retail employment is restaurants and bars, which creates jobs for 65,300 workers. Following that is the department store, warehouse club, and superstore sector, with nearly 20,500 employees. Motor vehicle and parts dealers provide 13,780 jobs and building material and garden supply stores employ some 8,600 workers. Annual retail sales amount to nearly $30 billion. Annual salaries for retail workers are $4 billion. Walmart is the largest retail employer in the state.
The Office of Science and Technology works with economic development organizations, research universities, federal laboratories, and the governor’s science adviser to promote the expansion of technology-based economic development and long-term sustainable employment in New Mexico. The office helps companies through tax incentives and tax credits, and creates partnerships between businesses and possible investors.
High-tech businesses account for 113 of every 1,000 private-sector employees in the central New Mexico region. New Mexico's high-tech industry employs 51,700 workers. Roughly 12,500 computer and mathematical science workers earn $875 million in combined annual salaries. The 12,350 workers employed in life, physical, and social science occupations receive an annual payroll of nearly $900 million.
Intel’s presence in Rio Rancho helps balance the economy by attracting additional high-tech companies, creating 15,000 jobs for local residents. Central New Mexico's biomedical and biotechnology industry numbers more than 100 companies, with employers ranging from Johnson & Johnson's Ethicon Endo-Surgery plant to tech-transfer start-ups.
The largest commercial airport in New Mexico is the Albuquerque International Sunport. The airport services about 6.4 million passengers and transports more than 67,000 tons of freight annually. About 3,400 people have jobs at the airport, whose civilian activities generate an economic impact of $2.13 billion and indirectly create nearly 40,000 jobs for Albuquerque residents.
There are 5,287 trucking companies located in New Mexico, most of them small, locally owned businesses. Trucks transport 94 percent of total manufactured tonnage in the state, which amounts to 202,016 tons per day. Nearly 88 percent of communities depend exclusively on trucking to transport their goods. The trucking industry in New Mexico provides 46,313 jobs. Total trucking industry wages paid in New Mexico are $1.6 billion. Freight is also transported by the two railroads operating in the state.
TRAVEL AND TOURISM
Tourism is a leading industry in New Mexico. Known as "the Land of Enchantment," nearly 12 million visitors are attracted each year by its beautiful scenery and inviting climate. The travel industry in New Mexico generates tourist expenditures of some $6.5 billion. About 55,000 residents work in the tourism industry, earning combined annual salaries of $984 million.
Additionally, annual tax revenue generated by tourism amounts to $679 million. Lodging tax collected from hotel stays accounts for almost $40 million annually. The yearly Albuquerque International Balloon Fiesta, the largest hot-air balloon festival in the world, attracts some 750,000 domestic and international visitors.
New Mexico is home to several military establishments and atomic energy centers. In 1942 Los Alamos was chosen by the U.S. government as the location for the Atomic Research Laboratory, which developed the first nuclear-fission, or atomic, bomb. After World War II, the Los Alamos National Laboratory developed the first thermonuclear-fusion, or hydrogen, bomb. Today the laboratory, operated by the University of California under contract with the federal government, conducts solar and nuclear research at its 36 square-mile (93 square-km) site.
The government built a modern city in Los Alamos to house employees of the laboratory, which remains northern New Mexico's largest employer. The laboratory’s annual budget is approximately $2.2 billion. The White Sands Missile Range, the location of the first atomic bomb explosion, provides the military with experimentation, test, research, assessment, development, and training facilities. One of the most powerful radio observatories in the world, the Very Large Array (VLA), is housed in Socorro County. Built in 1973 at a cost of $79 million, it is one of the world's premier astronomical radio observatories and provides jobs for 100 workers.
-World Trade Press