Commentary: The U.S. Bureau of the Census recently released 2018 export data for Metropolitan Statistical Areas (MSAs), which are defined by the U.S. Office of Management and Budget as being an urbanized area of at least 50,000 people, in which counties and cities are grouped into specific geographical areas for census purposes and to aggregate related statistical data.. The top 10 exporting MSAs with their 2018 export totals are as follows: Houston ($120.7 billion), New York ($97.6 billion), Los Angeles ($64.8 billion), Seattle ($59.7 billion), Chicago ($47.2 billion), Detroit ($44.1 billion), New Orleans ($36.5 billion), Dallas ($36.2 billion), and Miami ($35.6 billion). A quick look at the first nine on this list reveals a mix of manufacturing, sea cargo, and hub powerhouses – virtual crème de la crème of U.S. export bases.
Tenth on this list is El Paso, which exported $30 billion in 2018 – a new record. The El Paso MSA, with 844,000 people, is the largest export base on the U.S. Mexico border, outpacing San Diego ($20.1 billion) and Laredo ($9.8 billion). And how does El Paso put up such impressive numbers that lets it hang out with the big dogs? Quite simply, trade with Mexico. For more than 50 years, the El Paso MSA has made trade with Mexico an important part of its economy. El Paso’s economy has been healthy lately, and this is reflected in the growth of exports by 16 percent between 2017 and 2018. El Paso now accounts for 10.4 percent of all Texas exports. Computer and electronic product manufacturing accounts for more than half of all El Paso's exports at 53 percent, followed by electrical equipment, appliance, and component manufacturing, which accounts for 11 percent of the MSA’s exports. El Paso's "all other" exports, which amount to about one-third of the total, rose 19 percent in 2018.
In the rest of the upper Rio Grande Corridor, the Las Cruces MSA’s exports, which includes all of Doña Ana County, grew by 6 percent in 2018 to $1.46 billion, making it the 128th largest export market in the U.S. Although this is down from an export high of $1.59 billion in 2015, and $1.569 billion in 2016, 2018 was the third highest export year for the Las Cruces MSA on record. The Santa Teresa region, the main industrial base in this MSA, accounts for almost all of Doña Ana County’s total exports. Santa Teresa accounts for more than 50 percent of all New Mexico’s MSA exports and 40 percent of the state’s total exports. Similar to El Paso, computer and electronic product manufacturing is the largest export category for the Las Cruces MSA, followed by electrical equipment, appliance, and component manufacturing. The Las Cruces MSA is followed by Albuquerque (21 percent of state exports), Farmington (0.8 percent of state exports), and Santa Fe (0.6 percent of state exports) – reflective of the fact that the Santa Teresa industrial base is the export engine of New Mexico.
Santa Teresa was originally designed as a supply base to Mexico’s maquiladora (twin plant) industry, but has evolved into a production base for products exported throughout the world. The Trump Administration’s threat of tariffs on Mexico, and the uncertainty of the renegotiation of the North American Free Trade Agreement, played a role in the dip in exports to Mexico by Santa Teresa in 2017.
The Albuquerque MSA’s exports grew 24 percent in 2018. At $771 million, this is down from a high of $2.2 billion in 2006 – a 65 percent decrease during the past 13 years. This MSA ranks 179th on the MSA export list. At nearly 40 percent, Albuquerque's largest export category is computer and electronic product manufacturing. This is reflective of the fact that the Albuquerque export base is heavily dependent on Intel Corporation’s production plant in Rio Rancho, which has experienced reduced production and employment during this same period of time. Unlike El Paso or the Las Cruces MSA, almost all of this export category is vested in one company, which makes the city’s export base vulnerable to production swings at this plant. In fact, if this category of exports were removed, Albuquerque would fall to 240th on the MSA export list. Recently, the Albuquerque MSA received some positive news when Intel announced that it was moving certain R & D functions to its Rio Rancho plant, and adding 300 employees to its workforce.
The MSA data indicates how intertwined the economies of El Paso and Santa Teresa are with Mexico via trade. This has helped build production and distribution bases in these regions that have created billions in investment and thousands of jobs tied to exports. Farther north, the Albuquerque MSA is more tied to Intel’s high-tech exports that end up in countries such as China, South Korea, and Japan. From a national and regional viewpoint, perhaps the most important aspect of the MSA export data is that it shows how important trade is at a local level, and the implications for jobs and investment tied to this trade.
Jerry Pacheco is Executive Director of the International Business Accelerator, a non-profit trade counseling program of the New Mexico Small Business Development Centers Network, and the President/CEO of the Border Industrial Association. He can be reached at 575-589-2200 or jerry@nmiba.com