Border economy still in flux due to COVID-19, but some signs point to recovery

Border Report

Hunt Institute highlights region's economic trends, warns of possible increase in bankruptcies absent another stimulus round

EL PASO, Texas (Border Report) – Even as the COVID-19 pandemic keeps the border economy in flux, some sectors show signs of recovery.

Incoming commercial truck traffic is trending up at Southern New Mexico’s Santa Teresa Port of Entry, where electronic components and computer parts are the main import, according to the Hunt Institute for Global Competitiveness.

“More people are teleworking, doing remote education and more telehealth, so there is more potential need for electronic products,” said Myrna Maldonado, the institute’s interim director.

Monthly commercial traffic at the border crossing was up 6.3% in September, while it remained nearly stagnant (a 0.9% increase) at El Paso’s commercial ports of entry, the institute’s November Economic Indicator Review shows.

El Paso’s ports of entry have been slower to recover, being they field not only shipments of electronics but also auto parts, the latter a sector hard hit by supply-chain disruptions due to the pandemic, Maldonado said.

Still, commercial activity is down at both crossings when compared year to year, she said.

And up until COVID-19 cases spiked again in October and the governor of New Mexico ordered non-essential business shutdowns in November, the city of Las Cruces led the region with 2,200 jobs gained. Juarez, Mexico also saw a fourth consecutive month of job growth through the end of September.

Vehicles line up to cross into Mexico through one of El Paso’s toll-collection bridges. (Julian Resendiz/Border Report)

El Paso has been missing out on some southbound vehicle toll-collection since the U.S. imposed non-essential international travel restrictions in March. However, paid pedestrian traffic into Mexico is up to levels not seen since April at three city-owned international bridges, according to the El Paso International Bridges Department.

Southbound international bridge traffic at El Paso’s Zaragoza International Bridge. (City of El Paso)
Southbound international bridge traffic at Downtown El Paso bridges. (City of El Paso)

The Hunt Institute report also includes indicators that the border economy is still hurting.

On a year-to-year basis, all sectors except manufacturing in trade in Las Cruces and manufacturing, transportation and utilities in Juarez show negative growth rates. That translates to 12,900 services jobs lost in El Paso from Sept. 2019 to Sept. 2020, and 7,800 such jobs lost in Las Cruces and Juarez combined. El Paso and Las Cruces also combined for 9,600 jobs lost in the leisure and hospitality industry year-to-year.

Another potentially troubling sign lies in the number of monthly bankruptcy filings. Those increased 54% in El Paso from September to October of this year, though that only meant going from 70 to 108 combined chapter 7, 11 and 13 protection requests.

“The stimulus package has relieved many in the community as well as other incentives that businesses may have benefited from,” Maldonado said. But, “we are expecting to have more increases in terms of bankruptcies if there no other stimulus for businesses and the community.”

To view the full report, click here.

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