El Paso Economic Indicators

January 27, 2022

El Paso’s economic expansion paused in December. The metro’s business-cycle index dipped, and its labor market contracted. Border crossings continued to recover in December, and trade volumes rose in November. Industrial production indexes slid, while manufacturing activity continued to expand.

Business-cycle index

The El Paso Business-Cycle Index fell an annualized 0.4 percent in December after increasing 4.2 percent in November (Chart 1). However, compared with prepandemic levels (February 2020), the index has completely recovered and is up 0.4 percent.

Labor market

In December, payroll employment in the metro contracted an annualized 2.8 percent, or by 753 jobs (Chart 2). Job losses were mostly widespread across sectors but largely driven by declines in the professional and business services (-611 jobs), and trade, transportation and utilities (-319) sectors. The leisure and hospitality and other services sectors grew by 298 and 74 jobs, respectively. Employment was little changed in construction and mining, financial activities and information services.

Since the onset of the pandemic and through December 2021, the metro’s payrolls remained down 1.9 percent, or a loss of 6,240 jobs. During this time, employment was down by 2,950 positions in the government sector, 2,913 in professional and business services, 1,534 in education and health services, and 910 in leisure and hospitality. The only sectors with employment above February 2020 levels included trade, transportation and utilities (1,397 jobs), and construction and mining (1,554).

El Paso’s unemployment rate fell from 5.4 percent in November to 5.2 percent in December. The Texas jobless rate dipped from 5.2 percent to 5.0 percent, while the U.S. figure declined from 4.2 percent to 3.9 percent.

International bridge traffic volumes

Northbound crossings surge

With the reopening of the U.S.–Mexico border to nonessential travelers, cross-border traffic continues to recover. According to the latest figures, the six-month moving average of El Paso District northbound crossings in December 2021 reached 2.1 million, 56.2 percent above December 2020 but 22.3 percent below December 2019 volumes (Chart 3). The El Paso District is defined as ports of entry in Columbus, New Mexico; El Paso, Texas; Presidio, Texas; Santa Teresa, New Mexico; Tornillo, Texas; and Ysleta, Texas.

Southbound traffic also climbs

U.S. Customs and Border Protection does not collect comparable data for southbound crossings. However, the city of El Paso’s International Bridges Department compiles and publishes data on southbound bridge traffic through the Paso del Norte, Stanton and Ysleta ports of entry. The six-month moving average of December 2021 southbound traffic volumes at these El Paso ports of entry totaled 656,736 crossings, up 47.2 percent on a year-over-year basis but 10 percent below December 2019 volume (Chart 4).

Trade

Annualized monthly trade through the El Paso Trade District rose 4.5 percent to $124.7 billion in November (Chart 5). The increase in trade was driven by import growth of 7.6 percent and export growth of 0.5 percent. Most trade through the El Paso Trade District came through the Ysleta Port of Entry (62.3 percent), while the Santa Teresa Port of Entry comprised 23.2 percent of total district trade volumes, and the El Paso Port of Entry made up 14.0 percent.

Industrial production and maquiladora-related activities

The monthly U.S. industrial production (IP) index fell from 102.0 in November to 101.9 in December but was up 3.7 percent from a year ago (Chart 6). Mexico’s IP index also edged down from 98.4 in October to 98.3 in November and was 0.7 percent higher than a year ago. The Institute for Supply Management (ISM) manufacturing index fell from November’s 60.6 percent to 58.8 in December and was down 1.7 percentage points from a year ago. However, because the figure remains above 50, it indicates expansion in the manufacturing sector. Comments from ISM panelists continued to indicate that raw-material shortages, high commodities prices, transportation difficulties, overseas supply-chain problems, worker absenteeism and labor turnover issues were hurdles to meeting strong demand. However, slight improvements in labor availability and supplier delivery were also noted.

U.S. auto and light-truck production fell from 9.3 million units in November to 9.0 million units in December. Monthly auto sales also fell from 12.9 million in November to 12.4 million in December. Industrial and auto activity are closely linked to the El Paso-area economy because of cross-border manufacturing relationships. Roughly half of maquiladoras in Juárez are auto related.