Study: Manufacturing leads economic recovery in border region

World

As thousands get back to work south of the border, officials expect economic activity to rub off on Far West Texas and Southern New Mexico communities

EL PASO, Texas (Border Report) – With manufacturing plants back at work, Juarez, Mexico is leading the jobs recovery in the greater El Paso region.

The latest Hunt Institute’s Paso del Norte Economic Indicator Review shows that non-farm employment increased only slightly in El Paso from June to July, continued falling in Las Cruces, New Mexico, but spiked almost 2% in Juarez. That’s more than an 8,300 month-to-month job gain for El Paso’s sister city across the border.

“In Ciudad Juarez, all employment sectors, except services, increased on a monthly basis led by manufacturing,” the study says. El Paso gained 400 manufacturing and 300 services jobs in July but lost 200 related to construction and trades; Las Cruces, N.M., lost about 1,300 services, construction and transportation jobs.

Though all three cities experienced job losses in the first six months of 2020 due to the COVID-19 pandemic, Juarez at the end of July nearly bounced back to employment levels from a year ago, according to the study.

Many factories south of the border stayed open with reduced staffing through the pandemic, but the Mexican government on June 1 gave those in the automotive, medical and other critical sectors a green light to expand operations.

Industry experts on both sides of the border concur that economic activity is picking up.

Jon Barela, CEO of the Borderplex Alliance

“We are seeing an economic recovery in manufacturing in Juarez and, to a certain degree in El Paso and Dona Aña county (New Mexico). This is due to the critical needs of consumers during this pandemic. Personal protective equipment, medical device manufacturing and the transportation sectors are all deemed essential, and that is giving us a recovery,” said Jon Barela, CEO of the Borderplex Alliance.

When factories resume production in Juarez, El Paso transportation, logistics and warehousing operations also get back to work, he said.

In Juarez, meantime, “economic activity is increasing day by day. You can see more cars on the streets, more semis headed (to El Paso),” said Arturo Galindo, who tracks economic statistics at the Juarez Chamber of Manufacturing. “Activity at shopping centers and even tourism is coming back, slowly but steadily.”

U.S.-run plants known here as maquiladoras make the bulk, but not all, of the manufacturing operations in Juarez. They directly employ more than a quarter of a million people. The maquiladoras are still down jobs since the pandemic, but experts expect they will reach pre-coronavirus employment levels soon.

“We still have a number of people hurting from this economic crisis, but I’m optimistic that the job creation momentum that we are seeing in the region will continue on both sides of the border,” Barela said. “As manufacturing leads the way for recovery, we will see other sectors following suit. Clearly, the warehousing, logistics and transportation sectors will benefit as they transport these items being manufactured in plants on both sides of the border.”

He added the El Paso-Juarez-Las Cruces region’s job and economic prospects were growing prior to the pandemic and that he expects that trend to continue taking off as the COVID-19 crisis passes.

“Our region will lead the economic recovery in both Mexico and the United States,” he said. “We continued to develop and create thousands of new jobs, especially in the manufacturing sector, prior to the COVID crisis. Now, it’s reshoring opportunities from other parts of Asia. We have a golden opportunity to continue the momentum.”

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