El Paso Economic Indicators
The El Paso economy softened in July. Employment slumped, and year-over-year housing sales and trade volumes weakened. Although industrial production and maquiladora activity continued to signal growth, this growth may be slowing.
The El Paso Business-Cycle Index declined at an annualized rate of 0.7 percent in July (Chart 1). The recent plateauing of the index is attributed to diminished employment growth in the metro.
July employment fell at an annualized rate of 1.7 percent, largely due to a loss of 1,010 professional and business services jobs. Despite the recent dip, year-to-date employment expanded at an annualized rate of 0.8 percent, and a net 1,530 jobs were added through July (Chart 2). The construction and mining sector contributed the most to year-to-date employment gains, adding 1,480 jobs to the local economy, with education and health services close behind, adding 1,050 jobs. However, a loss of 1,970 jobs within the professional and business services sector dampened much of the net year-to-date gains.
The El Paso unemployment rate inched up from 3.8 in June to 3.9 percent in July. The Texas and U.S. monthly unemployment rates remained at 3.4 percent and 3.7 percent, respectively.
El Paso existing-home sales (annualized) declined 3.7 percent year over year to 8,412 in July (Chart 3). Median home prices rose 4.2 percent to $162,821 from July 2018 to July 2019.
Annualized total trade in El Paso was $76.1 billion in June, down 8.6 percent from $83.3 billion a year earlier (Chart 4). This ebb in trade was driven by decreases in both exports and imports. Exports totaled $30.3 billion in June, a year-over-year decrease of 10 percent, while imports totaled $45.8 billion, an 8 percent decline from June 2018. Weakened trade volumes may be due to increased delays at the border.
Industrial Production and Maquiladora Activity
U.S. industrial production continued to climb, albeit at a slower pace than previous months, up 0.5 percent year over year in July (Chart 5). The Institute for Supply Management manufacturing index fell to 51.2 in July from 51.7 in June. Despite the monthly decline, the index remained above 50 and continued to signal growth, although it may be slowing. U.S. and Mexican production and manufacturing trends are important to the local economy because of cross-border manufacturing relationships.
According to Mexico’s official series, maquiladora employment rose 3.6 percent year over year in May to 278,766, but month-to-month employment continued its decline for the third straight month, with 1,277 jobs lost since March. U.S. auto and light-truck production was 11.4 million, 9.2 percent above the 10.4 million produced a year earlier. However, monthly auto sales were mostly unchanged from a year ago, with 17.0 million sold in July 2019 versus 17.1 million in July 2018. Auto sales are closely linked to the local economy because roughly half of maquiladoras in Juárez are auto related.
NOTE: Data may not match previously published numbers due to revisions. The El Paso metropolitan statistical area includes El Paso and Hudspeth counties.
About El Paso Economic Indicators
Questions can be addressed to Marycruz De León at email@example.com. El Paso Economic Indicators is released on the fourth Wednesday of every month.