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McAllen Leads Texas Border Economies
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0 Comments ::  :: ECONOMY |
Texas border economies
South Texas economies are growing faster than the state’s as a whole and will likely continue the pace through the rest of the year, a senior Federal Reserve economist predicted.
[Also see our article on Border Security Funding Helping McAllen's Hot Real Estate Market]
A raft of promising economic data likely means more jobs for cities like McAllen, Harlingen and Brownsville, according to Keith R. Phillips, senior economist at the San Antonio branch of the Federal Reserve Bank of Dallas during a conference in Laredo this week.
Mexico’s maquiladora industry, which is linked to U.S. border jobs, is likely to bounce back from last year’s slip. The healthcare sector, a fast-growing local economic anchor, will likely continue to expand.
And as the finance, real estate and construction sectors continue to surge in the Rio Grande Valley, it’s likely that the number of jobs in the McAllen area will increase 4.5 percent and the Brownsville-Harlingen metro area will see 3.5 percent job growth.
According to an index compiled by the Dallas Fed that tracks employment, wages, retail sales and unemployment, the McAllen area has the border’s fastest growing economy, followed by Laredo and Brownsville metros. All three are growing faster than the Texas economy as a whole. El Paso’s metro area lags behind the state.
Last year, the number of jobs in the McAllen area grew 3.2 percent, and may be revised up, as residential and commercial construction values were up strongly. Jobs in health care, finance and real estate are growing strongly, but manufacturing declined.
However, the area remains the fourth least-expensive place to live in the nation, and a new outlet mall in Mercedes, hospital expansion and a burgeoning maquiladora industry in Reynosa all signal continued strength in 2007.
In 2006, the number of jobs in the Brownsville area grew 3.5 percent, bolstered by construction, finance and real estate. Manufacturing and health services were particularly strong.
Phillips expects job growth to remain about the same this year; as two new industrial parks opening in Matamoros are expected to spur business services in Brownsville, health care will likely continue to expand and tourism remain strong.
While job growth along the Texas-Mexico border has typically been faster than both the state and U.S. yearly averages for more than a decade, incomes have lagged well behind.
The number of U.S. jobs rose by .45 percent from 2000 to 2006, but over that period the Brownsville area posted a 2.2 percent jump and the McAllen area a 4.79 percent surge, the largest increase in the Texas border region.
But people in Brownsville earned about half the national per capita income in 2004, and McAllen-area incomes were about 46 percent of the U.S. average that year, behind El Paso, Del Rio, Laredo and Brownsville in that order. Only incomes in Eagle Pass were lower that those in McAllen among the six major border metros.
Even though border incomes are still behind the U.S. average, they have lately been growing faster than those for the rest of the nation.
“Growing income is a challenge to the border,” Phillips said at a Texas A&M International University luncheon.
Border economies face other challenges as well.
While the Mexican peso’s recent relative stability has also boosted the South Texas economy, “the peso is always a risk factor,” Phillips said. The currency has weathered two Mexican presidential elections without a major devaluation, which can hurt Mexicans’ buying power in the United States and impact U.S. border retailers.
Phillips also warned that drug-related border violence could hamper area business and that an increase in the U.S. federal minimum wage being considered by Congress may slow job growth and increase unemployment if passed.
By Matt Whittaker The Brownsville Herald
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