University of Texas at El Paso DigitalCommons@UTEP Border Region Modeling Project Department of Economics and Finance 10-2018 Borderplex Business Barometer, Volume 2, Number 10 Thomas M. Fullerton Jr. University of Texas at El Paso, tomf@utep.edu Omar Solís University of Texas at El Paso, osolis3@miners.utep.edu Esmeralda P. Muñiz University of Texas at El Paso, eporozcogutierrez@miners.utep.edu Aaron Nazarian University of Texas at El Paso, adnazarian@miners.utep.edu Steven L. Fullerton University of Texas at El Paso, slfullerton@miners.utep.edu Follow this and additional works at: https://digitalcommons.utep.edu/border_region Recommended Citation Fullerton, Thomas M. Jr.; Solís, Omar; Muñiz, Esmeralda P.; Nazarian, Aaron; and Fullerton, Steven L., "Borderplex Business Barometer, Volume 2, Number 10" (2018). Border Region Modeling Project. 65. https://digitalcommons.utep.edu/border_region/65 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.
October 2018 Border Region Modeling Project Thomas M. Fullerton, Jr. Omar Solis Esmeralda P. Muñiz Aaron Nazarian Steven L. Fullerton 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 500 West University Avenue El Paso, TX 79968-0543 Physical Address College of Business Administration, Room 325 University of Texas at El Paso Email tomf@utep.edu eporozcogutierrez@miners.utep.edu adnazarian@miners.utep.edu slfullerton@miners.utep.edu Telephone 915-747-7747 915-747-7775 Fax 915-747-6282 Website http://academics.utep.edu/border Borderplex Business Barometer, Volume 2, Number 10 Onwards and Upwards The Federal Reserve Bank of Dallas Business Cycle Index for the El Paso metropolitan economy set another record in August. To a large extent, that reflects ongoing labor market health. Unemployment has remained below 5 percent in El Paso for the better part of two consecutive years for the first time since 1972. Preliminary data indicate that wages are rising at rates in excess of inflation this year, also. Given the above, it is not surprising that the El Paso Household Economic Stress Index continues to remain low by recent standards. Higher interest rates have yet to levy very much damage on household well-being, but that will potentially change in future months. At present, current economic conditions have translated into lower supplemental nutrition assistance program (SNAP or food stamp) enrollments. El Paso County participation remained below 175,000 for a seventh consecutive month again in September. At $154,000, the median housing price for single-family units was above the prior year level again in August. It has only been in recent months that the median price exceeds $150,000 on a sustained basis. The supply side of the market is still tight. Months of inventory dropped to 4.2 in August, the lowest it has been since 2006. The average sales time was only 93 days in August. Unleaded gasoline prices declined slightly to $2.68 per gallon in September. That is 20 cents per gallon above the year-ago average when fuel prices spiked in response to Hurricane Harvey. While gasoline has been relatively expensive throughout the first three quarters, the September price is approximately 58 cents per gallon below the September 2014 average. Geopolitical strife and unpredictable weather patterns contribute to unexpected supply variations in this market and uncertainty abounds as 2018 heads into the fourth quarter. The Las Cruces unemployment rate remained more than 100 basis points below yearago levels for a fifth consecutive month in August. Preliminary Bureau of Labor Statistics data indicate that the Doña Ana County civilian labor force continued to decline in August, as Permian Basin - Little Texas energy companies continue to lure workers out of the Mesilla Valley. Closer to home, employment in Las Cruces has increased on a year-to-year basis for every month in 2018. Illustrative of improved labor market health, area SNAP caseloads remained below the 28,000 mark for a seventeenth consecutive month in August. The peso-per-dollar nominal exchange rate declined by 31 centavos in August. Although a new trade accord (USMCA) with Canada and Mexico has been announced, there is enough global economic and financial uncertainty to maintain a sizable gap between the nominal exchange rate and the Borderplex restaurant price ratio. If large scale economic disruptions are avoided, further divergence between those measures should be avoided. Traffic volumes across the international bridges have been relatively stable in 2018. For large trucks, that reflects merchandise trade flow patterns through the El Paso Customs District. Manufacturing orders in Northern Mexico have also been fairly stationary in 2018. If a business cycle downturn is avoided, reduced trade frictions between Washington and Mexico City may reverse those trends.
Borderplex Business Barometer Border Region Modeling Project Department of Economics & Finance University of Texas at El Paso
Metro Business-Cycle Index for El Paso 240 2017 2018 Seasonally Adjusted Index (October 1980 = 100) 235 230 225 220 Source: Federal Reserve Bank of Dallas
240 Metro Business-Cycle Index for El Paso Seasonally Adjusted Index (October 1980 = 100) 230 220 210 200 190 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: Federal Reserve Bank of Dallas
El Paso Household Economic Stress Index 6 2017 2018 5 Index 4 3 2 Source: UTEP Border Region Modeling Project
20 El Paso Household Economic Stress Index 15 10 5 Index 0-5 -10-15 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: UTEP Border Region Modeling Project
El Paso County Unemployment Rate 6 2017 2018 Unemployment Rate (Not Seasonally Adjusted) 5 4 3 Source: Bureau of Labor Statistics
11 El Paso County Unemployment Rate 10 Unemployment Rate (Not Seasonally Adjusted) 9 8 7 6 5 4 3 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: Bureau of Labor Statistics
El Paso County SNAP (Food Stamp) Enrollment 190,000 2017 2018 185,000 Number of SNAP Recipients 180,000 175,000 170,000 Source: Texas Health and Human Services Commission
200,000 El Paso County SNAP (Food Stamp) Enrollment 180,000 Number of SNAP Recipients 160,000 140,000 120,000 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Starting in September, 2014, the number of SNAP recipients is recorded for the end of each month. Source: Texas Health and Human Services Commission
El Paso Median Housing Prices $160,000 2017 2018 $155,000 Nominal Price $150,000 $145,000 $140,000 $135,000 Source: Texas A&M Real Estate Center
$160,000 El Paso Median Housing Prices $150,000 Nominal Price $140,000 $130,000 $120,000 $110,000 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: Texas A&M Real Estate Center
Months of Housing Inventory for El Paso 6.0 2017 2018 5.5 Months 5.0 4.5 4.0 Source: Texas A&M Real Estate Center
14 Months of Housing Inventory for El Paso 12 10 Months 8 6 4 2 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: Texas A&M Real Estate Center
El Paso Gasoline Prices $3.50 2017 2018 Nominal Price (Dollars per Gallon) $3.00 $2.50 $2.00 $1.50 Source: GasBuddy.com
$5.00 El Paso Gasoline Prices Nominal Price (Dollars per Gallon) $4.00 $3.00 $2.00 $1.00 $0.00 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: GasBuddy.com
Doña Ana County Unemployment Rate 8.0 2017 2018 Unemployment Rate (Not Seasonally Adjusted) 7.5 7.0 6.5 6.0 5.5 5.0 4.5 Source: Bureau of Labor Statistics
9 Doña Ana County Unemployment Rate 8 Unemployment Rate (Not Seasonally Adjusted) 7 6 5 4 3 2 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: Bureau of Labor Statistics
Las Cruces Area SNAP (Food Stamp) Cases 35,000 2017 2018 Number of SNAP Cases 32,000 29,000 26,000 Source: New Mexico Human Services Department
40,000 Las Cruces Area SNAP (Food Stamp) Cases Number of SNAP Cases 30,000 20,000 10,000 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: New Mexico Human Services Department
Restaurant Price Ratio and Exchange Rate 22 2017 Restaurant Price Ratio 2018 Restaurant Price Ratio 2017 Nominal Exchange Rate 2018 Nominal Exchange Rate 20 18 Pesos per Dollar 16 14 12 10 Source: UTEP Border Region Modeling Project and Banco de Mexico
Restaurant Price Ratio and Exchange Rate 24 Price Ratio Exchange Rate 20 Pesos per Dollar 16 12 8 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: UTEP Border Region Modeling Project and Banco de Mexico
Real Peso-per-Dollar Exchange Rate Index 150 2017 2018 130 Index (March 1997 = 100) 140 120 110 Source: UTEP Border Region Modeling Project
150 Real Peso-per-Dollar Exchange Rate Index 130 Index (March 1997 = 100) 110 90 70 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: UTEP Border Region Modeling Project
Personal Vehicle International Bridge Crossings to El Paso 1,300,000 2017 2018 1,200,000 Number of Vehicles 1,100,000 1,000,000 900,000 Source: Bureau of Transportation Statistics and U.S. Customs and Border Protection
1,500,000 Personal Vehicle International Bridge Crossings to El Paso 1,400,000 1,300,000 1,200,000 Number of Vehicles 1,100,000 1,000,000 900,000 800,000 700,000 600,000 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: Bureau of Transportation Statistics and U.S. Customs and Border Protection
Pedestrian International Bridge Crossings to El Paso 700,000 2017 2018 Number of Pedestrians 600,000 500,000 400,000 Source: Bureau of Transportation Statistics and U.S. Customs and Border Protection
900,000 Pedestrian International Bridge Crossings to El Paso 800,000 Number of Pedestrians 700,000 600,000 500,000 400,000 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: Bureau of Transportation Statistics and U.S. Customs and Border Protection
Cargo Truck International Bridge Crossings to El Paso 2017 2018 80,000 Number of Cargo Trucks 70,000 60,000 50,000 Source: Bureau of Transportation Statistics and U.S. Customs and Border Protection
90,000 Cargo Truck International Bridge Crossings to El Paso Number of Cargo Trucks 70,000 50,000 30,000 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: Bureau of Transportation Statistics and U.S. Customs and Border Protection
Total Trade through the El Paso Customs District 2017 2018 Total Trade (Exports + Imports) in Millions of Nominal Dollars $10,000 $9,000 $8,000 $7,000 $6,000 Source: U.S. International Trade Commission
$12,000 Total Trade through the El Paso Customs District Total Trade (Exports + Imports) in Millions of Nominal Dollars $10,000 $8,000 $6,000 $4,000 $2,000 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: U.S. International Trade Commission
Real Total Trade through the El Paso Customs District $5,000 2017 2018 Total Trade in Millions of 1982 Dollars $4,500 $4,000 $3,500 $3,000 Source: U.S. International Trade Commission and Bureau of Labor Statistics
$6,000 Real Total Trade through the El Paso Customs District Total Trade in Millions of 1982 Dollars $5,000 $4,000 $3,000 $2,000 $1,000 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: U.S. International Trade Commission and Bureau of Labor Statistics
Export-Oriented Manufacturing Employment in Ciudad Juárez 2017 2018 290,000 280,000 Number of Jobs 270,000 260,000 250,000 240,000 Source: INEGI
290,000 Export-Oriented Manufacturing Employment in Ciudad Juárez 260,000 Number of Jobs 230,000 200,000 170,000 140,000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: INEGI
Northern Mexico Manufacturing Orders Index 70 2017 2018 65 Index (Range: 0-100) 60 55 50 45 40 Source: Banco de México
70 Northern Mexico Manufacturing Orders Index 60 Index (Range: 0-100) 50 40 30 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: Banco de México
Quarterly Indicator of Economic Activity for the State of Chihuahua 130 2016 2017 Index (2008=100) 120 110 100 Quarter 1 Quarter 2 Quarter 3 Quarter 4 Source: INEGI
140 Quarterly Indicator of Economic Activity for the State of Chihuahua 120 Index (2008 = 100) 100 80 60 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: INEGI
Total Value of Construction in the State of Chihuahua 1,600,000 2017 2018 Thousands of June 2012 Pesos 1,400,000 1,200,000 1,000,000 800,000 Source: INEGI
2,000,000 Total Value of Construction in the State of Chihuahua 1,750,000 Thousands of June 2012 Pesos 1,500,000 1,250,000 1,000,000 750,000 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: INEGI
Real Retail Activity Index for the State of Chihuahua 225.00 2017 2018 200.00 Index (2008 = 100) 175.00 150.00 125.00 100.00 Source: INEGI
225.00 Real Retail Activity Index for the State of Chihuahua 200.00 175.00 Index (2008=100) 150.00 125.00 100.00 75.00 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: INEGI
University of Texas at El Paso Diana Natalicio, President Carol Parker, Provost Roberto Osegueda, Vice President for Research UTEP College of Business Administration Stephen Crites, Interim 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: http://academics.utep.edu/border. For additional information, contact the Border Region Modeling Project - CBA 236, UTEP Department of Economics & Finance, 500 West University Avenue, El Paso, TX 79968-0543, USA, (915) 747-7775.