El Paso can expect a slight uptick in demographic and economic growth in the next few years, according to the latest economic outlook report created by The University of Texas at El Paso’s Border Region Modeling Project (BRMP).
New residents will purchase and register more automobiles, adding to the number of vehicles on the roads, increase annual retail sales to more than $12 billion, and lead to higher levels of residential and non-residential construction, said Tom Fullerton, Ph.D., UTEP professor of economics and finance.
The report also documents ongoing economic growth in Juárez, Mexico, due mostly to export-oriented manufacturing, and relatively slow growth in Las Cruces, New Mexico.
Area leaders from the fields of finance, construction, real estate, retail property management, hospitality and manufacturing, and representatives from the region’s public utilities and government use data in the forecast to plan for the business conditions they will face during the next two years, said Fullerton, who has produced these annual reports since 1998.
The information gives decision-makers in El Paso; Las Cruces; Juárez; and Chihuahua City, Mexico, an idea of the economic conditions they will likely experience while developing plans to allocate resources.
“We cover everything associated with the border area economy from A-Z,” Fullerton said, referring to a list that includes population changes, employment figures, hotel and income data, military troop levels, and even weather reports. “Some of the data in this model go back five decades.”
Fullerton said the report takes about a year to create. Adam Walke, BRMP research associate economist, and UTEP economic graduate students Ernesto Duarte and Juan Cárdenas assisted with the 2015 report released in December.
The researchers spent months gathering and updating historical data and forecasts of the U.S. and Mexican economies before inputting the data into a 250-equation computer model and interpreting the results. Each report forecasts two years into the future.
Roberto Coronado, Ph.D., assistant vice president in charge and senior economist with the Federal Reserve Bank of Dallas, El Paso Branch, assisted Fullerton on several of the first BRMP annual reports while a UTEP graduate student in the late 1990s.
“I think it is very powerful to have the economic information the University provides through this research center,” Coronado said. “It’s always better to have the best information available and I believe the information the University provides is quite valuable.”
Pedro Niño, Jr., a research analyst with CBRE Inc., a national company that offers commercial real estate services with an El Paso office, said he began to read the report as a UTEP graduate student in economics and has cited the data in his professional reports.
“I translate the information about jobs, trade and manufacturing into real estate terms,” said Niño, another of Fullerton’s former students. “At the end of the day, this forecast offers a good picture of the economy now and in the coming months. It offers a full perspective.”
Dinah Kilgore, executive director/chief appraiser of the El Paso Central Appraisal District, said she has read every BRMP annual report since its inception. She called it a reliable tool that helps anticipate staffing needs, land valuations, and possible zoning changes. She planned to order additional copies of the report to share with other departments around her office.
“As appraisers, we’re always interested in seeing the direction the city is going; what kind of industry is coming,” Kilgore said, then added rhetorically, “Why would we keep coming back if the information wasn’t useful?”
The BRMP was one of the main reasons Fullerton came to UTEP from the University of Florida in 1996. UTEP, with the support of the business community, wanted to hire someone who could conduct the kind of border economic research that could benefit entities at the regional and international levels.
Bob Cook, president and CEO of El Paso-based Cook Strategies Group, LLC, recalled being a proponent in the mid-1990s of creating an independent third-party organization that could provide a comprehensive analysis of the regional economy.
“It was great for the University to step up,” said Cook, an economic development professional for more than 30 years, including leadership stints with the Greater El Paso Chamber of Commerce and founding president of the El Paso Regional Economic Development Corporation (REDCo). “The data were very helpful to us as another check as to whether or not we were doing our job.”
Among the BRMP’s main financial supporters are the El Paso Water Utilities, Hunt Communities, and the City of El Paso’s Office of Management and Budget. Fullerton and Walke periodically also participate on inter-disciplinary research grants with faculty from other colleges on campus and are finalizing a multi-year project underwritten by the Water Research Foundation in Denver.
Author: Daniel Perez – UTEP Communications