Due to the complex and sometimes subjective nature of economics, we reviewed a wide range of sources to help us break down the current economic activity happening in Eddy County and New Mexico.
Oil & Gas
Residents know that the Permian Basin’s natural resources, specifically oil and gas, are the foundation of our local economy. In 2021 New Mexico became the second-largest producer of crude-oil in the country, accounting for more than 11% of the country’s production. (U.S. Energy Information Administration). In fact, much of the state’s income is derived from oil and gas, with a total contribution of $2.9 billion to the state budget. The Permian Basin in New Mexico has more than 25,000 oil wells and the industry provides 1 in 7 jobs for NM residents (New Mexico Oil & Gas Association).
Retail Trade
Retail trade includes establishments who are involved in the sale and distribution of merchandise or provide a service. Examples include motor vehicle and parts dealers, furniture and appliance stores, clothing, food services, and drinking places. From the big box stores to the small businesses, 24% of jobs in NM are supported by the retail industry (National Retail Federation).
Construction
This includes private, commercial, residential, railroad, power, communications, and federal construction. In New Mexico, construction contributed $4.2 billion of the states GDP. According to a report from August 2022 from the Association of General Contractors, the construction industry employs a total of 54,600 New Mexicans (AGC 2022).
Film
It was 1890 when the first film was made in New Mexico, and the industry has recently flourished as one of the governor’s target industries for growth. Financial incentives and development of production facilities, including the Albuquerque Studios, have created more opportunities for local productions. “New Mexico created an incentive program for the film industry, offering 25% to 35% of qualified spends in tax credits. Governor Michelle Lujan Grisham claims the industry spent a record $855 million in the state in 2022” (Robb 2022 deadline.com).
Government Spending
More than one third (over 27 million acres) of all land in New Mexico is managed by the federal government. The Bureau of Land Management owns nearly 50% of the 27 million acres that make up our state. The Forest Service claims nearly 35% and Department of Defense claims nearly 13%. The remaining federal acreage is claimed by National Parks Service and the Forest Service (ballotpedia.org). In addition to military research and defense, NM’s federal land in the state is used primarily for recreation, preservation, and natural resource development. For example, the economic impact of hunting and fishing in New Mexico reaches $700 million annually, much of that on federal land (ABQ Journal, 2014).
Agriculture
New Mexico has 40.7 million acres in farmland (www.eia.gov), producing valuable crops including cotton, peanuts, wheat, hay, and corn. New Mexico is the largest producer of pecans, valued at $188.9 million and is the fourth largest producer of peppers, valued at $44.9 million. (KRQE 2022). The state boasts 1.39 million head of cattle, including 337,000 milk cows and 463,000 beef cows. At the end of 2020, New Mexico was ninth in milk production, producing more than 8 billion pounds of milk annually (USDA National Agricultural Statistics Service 2022).
Sustainable & Green Energy
New Mexico has substantial renewable resources from solar, wind, hydroelectric, biomass, and geothermal energy. NM is the ninth-largest renewable energy producer in the nation (NM Economic Development Department). According to the Department of Workforce Solutions, the state’s Energy Transition Act has set a statewide renewable energy standard of 50% by 2030 and 80% by 2040. Locally, HF Sinclair made an investment of more than $600 million in Artesia’s refinery. The new unit is scaled to produce approximately 125 gallons of renewable diesel that will be exported to California and other western states (Kotrba 2022).
Aerospace & Military
“New Mexico has an ideal terrain and climate where defense and Aerospace projects can be tested together within restricted airspace. The 18,000-acre Spaceport America is a hub for major industry players such as UP Aerospace and Virgin Galactic. New Mexico also hosts several military installations, including Holloman, Cannon, and Kirtland Air Force bases, Fort Bliss army base, and the White Sands Missile Testing Range.” (World Atlas, 2020).
SOURCES
New Mexico Oil and Gas Association: https://www.nmoga.org/benefits
Biggest Industries in NM. Victor Kiprop. February 5 2020. World Atlas. https://www.worldatlas.com/articles/what-are-the-biggest-industries-in-new-mexico.html
NM Department of Workforce Solutions. Industry Spotlight, Retail Trade. https://www.dws.state.nm.us/Portals/0/DM/LMI/IndSpotlight_Sept130911.pdf
National Retail Federation: https://nrf.com/retails-impact/new-mexico
The Economic Impact of Construction in the United States and New Mexico. The Associated General Contractors of America. https://www.agc.org/sites/default/files/Files/Construction%20Data/NM.pdf
New Mexico Sees Record $855.4 Million in Direct Production Spending; Officials Tout Incentive Programs by David Robb, July 14, 2022. www.deadline.com
Federal Land Policy in New Mexico. (ballotpedia.org)
HF Sinclair Begins Renewable Diesel Production in Artesian, New Mexico by Ron Kotrba, August 9, 2022 www.biobased-diesel.com
KRQE.com Most Valuable Crops in New Mexico by STACKER, July 19, 2022
New Mexico Annual Bulletin 2020, USDA National Agricultural Statistics Service
NM Industries. Victor Kiprop. February 5, 2020. Link: https://www.worldatlas.com/articles/what-are-the-biggest-industries-in-new-mexico.html
