N.M.'s economy still lags U.S.

Unemployment continues to dip, but state has fewer workers than decade ago

New Mexico's unemployment rate continues to inch downward but remains one of the country's highest, according to a monthly report released Friday.

Data from the state Department of Workforce Solutions show government agencies have pared payrolls over the past year. But the private sector, particularly the construction and hospitality industries, drove some job growth. The unemployment rate in the state has been decreasing since April, most recently dropping from 6.3 percent in August to 6.2 percent in September.

Observers say the numbers reflect an economy that is looking up but still lagging the nation and even the state's own prerecession boom, with fewer workers than a decade ago and an exodus of educated young job seekers.

North Dakota boasted the nation's lowest unemployment rate last month, at 2.4 percent, followed closely by Colorado and Hawaii at 2.5 percent.

New Mexico's unemployment rate is still the second highest in the country, after Alaska.

Nonetheless, Simon Brackley, president and CEO of the Santa Fe Chamber of Commerce, points to a range of businesses that are hiring in the city as a sign of improving confidence in the local economy. Santa Fe's unemployment rate was 5.3 percent in September, down from 5.4 percent a year earlier, according to state data. Unlike the state rates, however, those figures are not seasonally adjusted.

While the city fares better than the state overall and the Albuquerque metropolitan area, its joblessness rate ranks even with that of Ohio, the third-highest rate in the nation.

Brackley pointed out the health care industry is expanding in Santa Fe, with Presbyterian Healthcare Services and Christus St. Vincent Regional Medical Center building new facilities. Meanwhile, local retailers are hiring heading into the holiday season, the film industry has been busy here and the art collective Meow Wolf is recruiting.

Across the state, employers added 6,800 jobs over the last year. The construction industry led the growth, with 3,000 new positions. While the public sector cut jobs, the trade, transportation and utilities sectors added 2,400 jobs over the last year, while business services gained 1,900 and the hospitality industry 1,700.

In Santa Fe, Brackley said, a shortage of affordable housing is still an obstacle for workers.

"Unemployment is headed in the right direction," he said. "There are positions open in Santa Fe. The challenge is housing. [Employers] can find people, but finding rental properties, workforce housing is very difficult."

That is a concern shared over at the New Mexico Hospitality Association, where President and CEO Jen Schroer says the tourism industry is growing, but workers in some travel destinations face challenges finding housing they can afford.

A growing number of tourists have been flocking to New Mexico year after year, according to state data, which has buoyed the hospitality industry.

Schroer credits the state's efforts to market the Land of Enchantment as a travel destination through the New Mexican True campaign.

"The New Mexico True brand has provided a good return on investment," she said.

Other factors also have boosted the state's travel industry: relatively low gas prices in recent years, the booming economies of surrounding states, such as Colorado, and a flourishing outdoor recreation industry -- a trend rustic New Mexico is well-positioned to seize upon.

The latest jobs report shows the number of workers in New Mexico -- about 929,000 -- still remains slightly lower than 10 years ago, when the labor force numbered 936,000 people.

Joey Atencio, the business manager at Local 16 of the Laborers International Union of North America, said the construction industry has faced a shortage of qualified workers, even as business has begun to pick up.

Los Alamos National Laboratory, the construction of a Facebook data center in Los Lunas and work at power plants in the northeast corner of the state have generated demand for construction workers, he said, and "qualified or experienced construction workers are hard to come by."

Many laborers with specialized training left the state while New Mexico's economy straggled out of the recession, Atencio added.

Some may come back, but Atencio doubted that most will. And while unions like his offer training programs, he said it can be a struggle to find workers who can pass the required background tests and drug tests.

The size of the state's workforce has grown slightly over the last year, by about 1,750.

"There is a small, but noticeable increase in the number of people in the labor force," said Michael O'Donnell, a research scientist at The University of New Mexico's Bureau of Business and Economic Research. "That's encouraging. But that's really not that much."

O'Donnell said the state has seen the flight, in particular, of younger, college-educated workers. The result is something like a hollowing out of New Mexico's labor force that could create a spiral, with workers leaving because they cannot find jobs and businesses hesitant to move into the state because they cannot find workers.

O'Donnell cautioned that the monthly unemployment reports are preliminary and based on surveys with results that can swing significantly when adjusted later.

But the decline in the unemployment rate is not too surprising, he said, given that the state is so far above the national rate.

"You would expect -- at some point -- the New Mexico economy would start to expand," O'Donnell said. "Hopefully, that's the beginning."

Contact Andrew Oxford at 505-986-3093 or aoxford@sfnewmexican­.com. Follow him on Twitter @andrewboxford.