Borderplex Business Barometer, Volume 2, Number 5

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1 University of Texas at El Paso Border Region Modeling Project Department of Economics and Finance Borderplex Business Barometer, Volume 2, Number 5 Thomas M. Fullerton Jr. University of Texas at El Paso, tomf@utep.edu Adam G. Walke University of Texas at El Paso, agwalke@utep.edu Omar Solís University of Texas at El Paso, osolis3@miners.utep.edu Esmeralda P. Muñoz University of Texas at El Paso, eporozcogutierrez@miners.utep.edu Follow this and additional works at: Part of the Regional Economics Commons Recommended Citation Fullerton, Thomas M. Jr.; Walke, Adam G.; Solís, Omar; and Muñoz, Esmeralda P., "Borderplex Business Barometer, Volume 2, Number 5" (218). Border Region Modeling Project This Article is brought to you for free and open access by the Department of Economics and Finance at DigitalCommons@UTEP. It has been accepted for inclusion in Border Region Modeling Project by an authorized administrator of DigitalCommons@UTEP. For more information, please contact lweber@utep.edu.

2 May 218 Border Region Modeling Project Thomas M. Fullerton, Jr. Adam G. Walke Omar Solís Esmeralda P. Muñiz Department of Economics & Finance College of Business Administration University of Texas at El Paso Mailing Address Border Region Modeling Project - CBA 236 UTEP Department of Economics & Finance 5 West University Avenue El Paso, TX Physical Address College of Business Administration, Room 325 University of Texas at El Paso tomf@utep.edu agwalke@utep.edu Telephone Fax Website Border Commerce & Economics Borderplex Business Barometer, Volume 2, Number 5 Border Economy Still on Track After faltering slightly last summer, the Federal Reserve Bank of Dallas El Paso Metropolitan Business Cycle Index has risen each month since September 217. In contrast, the El Paso Household Economic Stress Index increased from 3.3 to 3.9 points between February and March. Factors contributing to that development include a pick-up in the rate of general price inflation and somewhat slower growth in local housing prices. Encouragingly, the index remains below its March 217 value of 4.4 points, indicating an improvement relative to last year. The El Paso County unemployment rate remained flat at 4.5 percent in March and countywide enrollment in the Supplemental Nutrition Assistance Program (SNAP) fell below 175,. The El Paso median housing price rose to $147,5 in March. While below the December 217 median price of $157,725, it is still more than the value recorded one year earlier. Reflective of overall market strength, March 218 housing inventory levels dropped below 5 months of supply for the first time since October 26. Global supply constraints, seasonal blend shifts, and strong demand have caused local retail gasoline prices to increase. In April, the average El Paso price of regular grade gasoline rose above $2.5 per gallon for the first time in 32 months. The Doña Ana County unemployment rate fell to 6.4 percent in March, nearly one percentage point below the level recorded a year earlier. The latest estimates from the Bureau of Labor Statistics indicate that the Doña Ana County unemployment rate has declined, in year-over-year terms, for 19 consecutive months. Las Cruces area SNAP caseloads also declined in both February and March of this year. The peso appreciated, in inflation-adjusted terms, relative to the dollar during the first quarter. Real peso appreciation makes goods and services priced in dollars more affordable to Mexican consumers. This may be one reason that the number of international bridge crossings increased in the first two months of 218 relative to early 217. Personal vehicle bridge crossings increased by 8.8 percent from February 217 to February of this year and pedestrian crossings rose by 8.1 percent over the same time span. This represents a continuation of the upswing in pedestrian and personal vehicle bridge traffic that began in late 217. The number of cargo vehicle bridge crossings also increased at the start of 218. The latter suggests that regional trade linkages between the United States and Mexico remain strong. The nominal volume of trade through the El Paso Customs District was also 8.4 percent higher during the first quarter of 218 than it was during the same period in 217. With ongoing NAFTA uncertainty, the number of export-processing jobs in Ciudad Juárez declined, on a year-over-year basis, in two of the last three months for which data are available. This is the first time such declines have been observed since 211 and it may forebode difficulties ahead for this important sector of the border economy. More favorably, the Northern Mexico Manufacturing Orders Index performed relatively well during the first quarter of 218. Although the pace of growth tapered off towards the end of 217, the Chihuahua state economic activity indicator suggests that modest growth of 2.3 percent occurred between 216 and 217. The value of construction in the state rebounded somewhat in February 218, while remaining well below year-ago levels. Finally, retail activity in the state suffered a setback in February, perhaps partly due to peso appreciation and an attendant increase in cross-border shopping by Mexican nationals.

3 Metro Business-Cycle Index for El Paso s 6' - II I I I I I I I I I Source: Federal Reserve Bank of Dallas

4 Metro Business-Cycle Index for El Paso 6' s ! II O'\... ;..., cu,.d ,-.tr-..._,, >< cu "'d -"'d ,j..- ::s < > "_.'-- cu r/ ' Source: Federal Reserve Bank of Dallas

5 El Paso Household Economic Stress Index >< i:::... Source: UTEP Border Region Modeling Project

6 El Paso Household Economic Stress Index ,_, Source: UTEP Border Region Modeling Project

7 El Paso County Unemployment Rate Source: Bureau of Labor Statistics

8 1 1 El Paso County Unemployment Rate Cl)... r/l ;:j 1 9 <t: >-. c 8 r/l <:13 Cl) r/l Cl) &j... c 6 Cl)..... E Cl) c ' Source: Bureau of Labor Statistics

9 El Paso County SNAP (Food Stamp) Enrollment , ! i::::: Cl) u Cl) ::: -. i 18, """-"7-1 C/"J. <.+--. ;... Cl), ) z 175, "" ! Source: Texas Health and Human Services Commission

10 2, El Paso County SNAP (Food Stamp) Enrollment u Cl) :::... 18, i 16, r:./j <+..; ;... Cl).r:J z 14, 12, Starting in September, 214, the number of SNAP recipients is recorded for the end of each month. Source: Texas Health and Human Services Commission

11 El Paso Median Housing Prices Cl) u. ;:::::....5 E z $15, $145, Source: Texas A&M Real Estate Center

12 El Paso Median Housing Prices $12, $11, ' Source: Texas A&M Real Estate Center

13 Months of Housing Inventory for El Paso s Source: Texas A&M Real Estate Center

14 Months of Housing Inventory for El Paso ' Source: Texas A&M Real Estate Center

15 El Paso Gasoline Prices ,.--..., = ;... Cl).. rn a ::::::l '--" Cl) u i:....s $2.5 $2. E $1.5 z Source: GasBuddy.com

16 El Paso Gasoline Prices, $ ! ;..., Cl)... $3. -i----9-lt-a '----W l :::::::I '--" $. -< Source: GasBuddy.com

17 Dona Ana County Unemployment Rate (!)... IJl ;:::! < h IJl ro (!) r./'l... 6 (!) ::: 1:: (!) 5 > (!) : lb-<:, \ Source: Bureau of Labor Statistics

18 Dofta Ana County Unemployment Rate,,.-.,. 8 -t "'d (l) +-> r:n ;:::l 7 ; j ' i::: r:n <I < 'C/J +-> 6 5.,_ j ::: 1:: (l) E S _--= i:: < Source: Bureau of Labor Statistics

19 Las Cruces Area SNAP (Food Stamp) Cases rfl Cl) 32, ! u.. z r/j c..., ;..., Cl),. :) 29, ! z 26, ,..., Source: New Mexico Human Services Department

20 Las Cruces Area SNAP (Food Stamp) Cases r/'j <!) 3, -t , j u... z r/) 4-4 ;..., <!) z 2, , ' Source: New Mexico Human Services Department

21 Restaurant Price Ratio and Exchange Rate 217 Restaurant Price Ratio Nominal Exchange Rate Restaurant Price Ratio Nominal Exchange Rate < '\'l> Source: UTEP Border Region Modeling Project and Banco de Mexico

22 Restaurant Price Ratio and Exchange Rate - Restaurant Price Ratio - Nominal Exchange Rate 8 ::::::::l Q!-+ Q) , ----j rfj rfj Q) Source: UTEP Border Region Modeling Project and Banco de Mexico

23 Real Peso-per-Dollar Exchange Rate Index , II r:- 11 Source: UTEP Border Region Modeling Project

24 Real Peso-per-Dollar Exchange Rate Index 13 6' Source: UTEP Border Region Modeling Project

25 Personal Vehicle International Bridge Crossings to El Paso ,3, <!)... u :E (+...; <!).D s z 1,2, 1,1, 1,, 9, Source: Bureau of Transportation Statistics and U.S. Customs and Border Protection

26 Source: Bureau of Transportation Statistics and U.S. Customs and Border Protection Personal Vehicle International Bridge Crossings to El Paso 1,5, tfl Cl)... C.) 1,2, :.2 1,1, 4- ;... ] 1,,,. _ z 9, 8, 7, 6, -t , ,

27 Source: Bureau of Transportation Statistics and U.S. Customs and Border Protection Pedestrian International Bridge Crossings to El Paso rn i:::.e 6, rn Q)... c...,. 1-t Q).r:J 5 5, z

28 Source: Bureau of Transportation Statistics and U.S. Customs and Border Protection Pedestrian International Bridge Crossings to El Paso 8, rn.s rn 7, -- Cl> "'O Cl)... 4-o i--. Cl) 'E 6, ;:::$ z 5, 4,

29 Cargo Truck International Bridge Crossings to El Paso , :\> \ Source: Bureau of Transportation Statistics and U.S. Customs and Border Protection

30 Source: Bureau of Transportation Statistics and U.S. Customs and Border Protection Cargo Truck International Bridge Crossings to El Paso r;/) 7, rt u <+-< ;..., (1),D s z 5, 3, ;

31 r/l Total Trade through the El Paso Customs District $1, Crj.5 E $9, * , l r/l i::: ;: 5 $8, --i E... + t $7, >< w '.../ (!) '"d crj ] $6, ,------,-----, ,------,-----, r i Source: U.S. International Trade Commission

32 rll a ::::::1 c;j.s E z <+-< rll a.s,,--.. rll t:: p., E... + rll t:: p., ><...,, u.l (1) '"d ro c;j...?2 $1, $8, $6, $4, Total Trade through the El Paso Customs District $2, Source: U.S. International Trade Commission

33 Sources: U.S. International Trade Commission and Bureau of Labor Statistics Real Total Trade through the El Paso Customs District rri a Q N O'\ --; (..+-+ rri i:: :=! -.5 <!) "O (13 -(13... $4,5 $4, $3,5

34 Sources: U.S. International Trade Commission and Bureau of Labor Statistics Real Total Trade through the El Paso Customs District r/l,...,,..., Q N \ --; c..-. r/l i:: a.s <l) "'O ro... $5, $4, $3, $1, , r---.., ,.-----r

35 Export-Oriented Manufacturing Employment in Ciudad Juarez 29, , r.n.d -. <+-< lo- (1).D s z 27, 26, 25, 24, Source: INEGI

36 Export-Oriented Manufacturing Employment in Ciudad Juarez rll.g 23, -. t o Q).D z 2, 14, Source: INEGI

37 Northern Mexico Manufacturing Orders Index ' 6 I <l) ::: "'-/ >< <l) "O i::: t------t 'b-<;\ ;y \'b- Source: Banco de México

38 Northern Mexico Manufacturing Orders Index 6 I ! Source: Banco de México

39 Quarterly Indicator of Economic Activity for the State of Chihuahua ' Jb _, N "d , Quarter 1 Quarter 2 Quarter 3 Quarter 4 Source: INEGI

40 Quarterly Indicator of Economic Activity for the State of Chihuahua ' - II ,1,....,..._.'--1 N '-_./ "'O h Source: INEGI

41 Total Value of Construction in the State of Chihuahua ,6, rn rn (!)... N,... N (!)..., '-+--< rn "'O g rn ;:::l : 1,4, 1,2, 1,, 8, Source: INEGI

42 Total Value of Construction in the State of Chihuahua rn rn Q)... N 1,5, N Q)..., rn ] 1,25, rn ;::::$ 75, ' Source: INEGI

43 Real Retail Activity Index for the State of Chihuahua ' II 115.oo '--' 15. "'d h Source: INEGI

44 Real Retail Activity Index for the State of Chihuahua 6' 15. '-' >< Cl) "O... = Source: INEGI

45 University of Texas at El Paso Diana Natalicio, President Carol Parker, Provost Roberto Osegueda, Vice Provost UTEP College of Business Administration Robert Nachtmann, Dean Steve Johnson, Associate Dean Erik Devos, Associate Dean Tim Roth, Templeton Professor of Banking & Economics UTEP Border Region Modeling Project Corporate and Institutional Sponsors: El Paso Water Hunt Communities UTEP College of Business Administration UTEP Department of Economics & Finance UTEP Hunt Institute for Global Competitiveness City of El Paso Office of Management & Budget UTEP Center for the Study of Western Hemispheric Trade Borderplex Business Barometer is a monthly publication of the Border Region Modeling Project (BRMP), a research unit within the Department of Economics & Finance at the College of Business Administration of The University of Texas at El Paso. BRMP information is available at: For additional information, contact the Border Region Modeling Project - CBA 236, UTEP Department of Economics & Finance, 5 West University Avenue, El Paso, TX , USA, (915)