After a good 2019, with low unemployment and rising wages, the El Paso region may see things slow this year, according to University of Texas at El Paso economists.
The recently released “Borderplex Economic Outlook to 2021” was prepared by UTEP economists Thomas Fullerton and Stephen Fullerton and addresses the economies of El Paso, Las Cruces, Juárez and Chihuahua.
“Borderplex economic growth faces a bumpy road in 2020,” the report begins. “In El Paso, that is primarily caused by projected employment cuts in construction, retail and manufacturing.”
The report expands on its economic assessment of the past year and was presented by Thomas Fullerton at Friday’s meeting of the Rio Grande Economics Association at the Federal Reserve Bank in Downtown.
Real bumpy roads are something El Paso drivers are all too familiar with and are probably residents’ No. 1 gripe, topping the list of issues in the recent special City Council elections.
But the report credits city government for doing “a good job in the primary areas where it truly influences economic growth: public safety, parks and infrastructure.”
Those areas, including streets, will be getting extra attention this year as a result of a 6.4% property tax increase that City Council overrode Mayor Dee Margo’s veto to approve in August.
Dallas, on the other hand, reduced its tax rate for the fourth straight year, which still left it with the state’s third highest city tax rate – following El Paso.
“Slower economic growth causes the rate of business formation to slow to a crawl through 2021,” the report states. “That outlook is also accompanied by increases in business and personal bankruptcies in 2020 and 2021.”
While unemployment in El Paso is likely to rise and stabilize at 4.8%, according to the report, that is low by the historical standards of the last four decades.
“The biggest contributing factor behind the unemployment rate increase is the projected decline in construction employment due to the completion of some large-scale non-residential projects,” it predicts.
Despite the slow-down, the report forecasts that low unemployment will continue to drive up wages and salaries nationally and in El Paso, where paychecks will total more than $16.4 billion by 2021.
According to the report, single-family housing starts, which rose by a healthy 5.6% in 2019, will likely level off this year and decline slightly next year.
Email El Paso Inc. reporter David Crowder at email@example.com or call (915) 534-4422, ext. 122 and (915) 630-6622.