El Paso economy starts to reactivate as local businesses see increase demand.
Keats Southwest sees a health rebound post-pandemic economy slowdown in El Paso.
Omar Ornelas, El Paso Times
The El Paso economy is expected to grow a bit slower in 2022 than in a surprisingly strong 2021, and slow further in 2023, University of Texas at El Paso economists project in a new report.
It’s projected to grow at a healthy 4.1% in 2022 to $30.4 billion, as measured by Gross Metropolitan Product, or economic output, compared to an estimated 4.9% in 2021, according to the recently released “Borderplex Economic Outlook to 2023.”
The El Paso economy performed dramatically better last year than the UTEP researchers’ had forecast in their previous report.
However, it grew much slower than the national economy’s surprising 5.7% growth rate last year — the best performance in more than 30 years.
“Growth in 2021 was more rapid than usual because of the resumption of so many economic activities that had been interrupted in 2020 (due to COVID-19-tied restrictions) and because interest rates remained very low,” Tom Fullerton, a UTEP economics professor and co-author of the economic outlook, said in an email.
El Paso’s economy grew slower than the national economy in 2021 because neighboring Juárez’s economy had a slower growth rate, which affected El Paso, Fullerton said. Also, the COVID-19-tied, 19-month closure of the U.S.-Mexico border to most Mexican travelers did not end until November, slowing El Paso commerce, he said.
“Growth in 2022 and 2023 will more closely match historical trends,” he said, adding that expected higher loan interest rates will lead to “decelerating expansion rates.”
More: Worst to best: El Paso hotel occupancy in 2021 among top in United States after dismal 2020
El Paso’s job growth will remain steady with jobs expanding to a total 465,864 in 2022, surpassing pre-pandemic levels, the UTEP report predicts.
Industry sectors with the highest job growth this year are forecast to be construction, transportation and warehousing, finance and real estate, call centers, and health care, the report shows.
However, this year’s unemployment rate is projected to remain above the pre-pandemic, 2019 rate, which is not surprising, Fullerton said, because “2019 was the first time in five decades that the El Paso jobless rate fell below 4% on an annual basis.”
El Paso per capita, or average, personal income is expected to decline to $39,992 this year due to the end of COVID-tied federal stimulus payments, Fullerton said.
However, it is to grow again in 2023 “due to improved worker productivity and a return to business cycle normality,” he said.
More: Airbnb, Vrbo short-term rental market explodes in El Paso in last four years
El Paso will continue to be well below the national per capita income level, estimated to be $62,080 this year and $64,489 in 2023, the UTEP report shows.
One caveat: The projected economic growth rates won’t be met if new COVID-19 variants become a problem, which likely would bring more supply chain disruptions and other economic obstacles, Fullerton cautioned.
El Paso 2022 economic forecast
GMP (economic output): $30.4 billion, up 4.1%
Jobs: 465,864, up 2.2%
Unemployment rate: 5.3%, down from average 7% in 2021.
Per capita personal income: $39,992, down 0.9%
Retail sales: $13.75 billion, down 0.2%
Single-family home starts: 3,044, up 4.4%
New home price (median): $208,309, up 5.3%
Resale home price (median): $204,592, up 5.1%
Source: UTEP “Borderplex Economic Outlook to 2023”
Credit: Source link