EL PASO, Texas (KTSM) – The growth of the economy in El Paso and Las Cruces is expected to slow down in the year 2024, according to an annual report by The Border Region Modeling Project and the Department of Economics and Finance at the University of Texas at El Paso (UTEP).
The report, known as the Borderplex Regional Economic Forecast, is used as a planning tool for businesses, public sector agencies, and university research projects and efforts.
The report highlighted 10 economic predictions for the year 2024, some of them positive and others negative.
One of the most concerning projections is that unemployment in El Paso is expected to increase from 4.2% in 2023 to 4.9% in 2024.
UTEP Economics Professor Tom Fullerton said that while this is concerning, the metric is good for El Paso relative to historical standards, and described the economy as stable.
“Overall, the economy is going to be softer in 2024. And jobs are not going to be quite as plentiful. But we don’t anticipate the labor market to shrink. And so we should avoid the problems that were observed in 2020. And the labor market should continue to rebalance” said Fullerton.
Fullerton said the two sectors of the economy expected to suffer the most are manufacturing and retail.
However, El Paso and Las Cruces are expected to see historical growth for their residents.
“Total personal income should exceed $40 billion for the first time in 2024. That translates into a per capita income of about 44, $45,000 per person, not only in El Paso, but also across the county line in Las Cruces,” Fullerton said.
Fullerton explained that a key factor in both El Paso and Las Cruces potentially reaching this historical threshold, is the increase in educational attainment by their residents.
The report also forecasts the peso-per-dollar exchange rate to average about $18.20 pesos, which is approximately a 40 centavo (cent) increase. Fullerton explained what this means for the border economy.
“Purchasing power for residents on the south side of the border is going to remain strong and we can expect a lot of retail exports to visitors from northern Mexico as long as the bridges don’t have excessively long wait times,” he said.
Fullerton added that while their projections indicate that 2024 will see economic growth, and a recession now seems unlikely, the outlook could always change.
“After 11 rounds of interest rate hikes, that is a very welcome development. It doesn’t mean we’re out of the woods. There’s still a lot of uncertainty out there in the economy,” he said.
“Internationally, there’s the threat of wars both in the Middle East as well as Eastern Europe, of war spreading in those regions that could cause severe economic upheavals internationally. Here in the United States, consumer indebtedness and household indebtedness has increased to fairly high levels,” he added.
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