The Paso del Norte World Affairs Council held a virtual panel with University of Texas El Paso’s Dr. Tom Fullerton to discuss economic predictions for 2021’s 3rd and 4th quarter.
Fullerton says recovery from the pandemic will increase the price of regular gasoline.
“The price of regular gasoline is expected to increase at a double-digit rate in 2021, and for the year as a whole, gasoline prices in El Paso County should average $2.22 per gallon. Anytime that gasoline and diesel prices increase, it will cause the transportation costs for households and local businesses to increase enormously,” said Fullerton.
The positive aspect of the increase in gas prices reflects a return to economic normalcy.
“Even though gasoline and diesel prices are increasing, at least it’s a consequence of increased business activity. Those types of energy price hikes are the types that the local economy handles a lot better,” said Fullerton.
Another bright spot in the economy has been an increase in home sales that will continue through 2021. Dr. Fullerton predicts there will not be any major changes to mortgage rates.
“Low mortgage rates are predicted to combine with local housing supply limitations to a sufficient degree to cause median prices for new single-family units to exceed $177,000 per house for the year as a whole. Mortgage rates are not predicted to increase very noticeably through this year. They may increase, but not enough to cause housing prices to falter,” said Fullerton.
Even though universities will be returning to mostly in-person instruction this fall, Fullerton predicts campuses will not see a full recovery of college enrollment until next year.
“College enrollments are not likely to fully recover until 2022 in El Paso, Las Cruces, Ciudad Juarez, and Chihuahua City. Even though college enrollments declined substantially last year and are probably not going to fully recover next fall, they should come back by 2022. This is because the demand for skilled labor has not gone away,” said Fullerton.
As the economy recovers, Fullerton says consumer confidence will increase.
“Aggregate retail sales should climb over 13 billion dollars in 2021 as the job rate declines and consumer confidence strengthens. That represents a rebound from what happened in 2020. Even though incomes increased in 2020, total retail activity declined last year. Those losses should be recovered in 2021,” said Fullerton.
Commercial trade is also expected to increase in the Borderplex area.
“As global trade accelerates, a double-digit rate of increase is also going to be tallied for the number of cargo vehicles that traverse the international bridges into El Paso from Ciudad Juarez,” said Fullerton.
More COVID vaccinations will lead to increased travel. And Fullerton says that this will mean an increase in travel prices.
“As the pandemic subsides, passenger flows are going to expand substantially at El Paso International Airport. Average round trip airfare at EPIA is predicted to jump by nearly 10% to $340 per ticket this year. That’s another one of those price jumps that no one likes to see. No one wants travel prices to go up, no one wants to see airfare increased. It is a consequence of the return to the direction of normalcy in terms of air passenger flows at EPIA, but I think it’s something that all of us will welcome,” said Fullerton.
These predictions give hope for economic recovery and an eventual return to normal.