Border boom pushes NM exports to record $5.4 billion – Albuquerque Journal
Copyright © 2022 Albuquerque Journal
New Mexico exports ballooned by 46% in 2021 to a new annual record of $5.4 billion, thanks largely to bustling activity at the Santa Teresa industrial parks along the Mexican border.
Total worldwide sales jumped by nearly $1.7 billion last year compared with 2020, representing a huge turnaround from a pandemic-induced trade slump in 2020.
That year, state exports plummeted by 21% to $3.69 billion, down from a 2019 peak of $4.68 billion, according to the U.S. Commerce Department.
But, last year, global sales blew past that previous annual record by $700 million, or 15% more than the 2019 pre-pandemic record.
The growth reflects significant expansion in general for New Mexico trade with countries around the globe, but, in particular, with sales to Mexico, the state’s No. 1 export market.
Sales to Mexico grew by 12% to $2.47 billion last year compared with 2020, setting a new annual record for exports to that country.
That demonstrates vibrant activity at the Santa Teresa industrial parks, where business is booming, said Jerry Pacheco, trade consultant and executive director of the International Business Accelerator, which works to recruit trade-related companies to the border region.
Pacheco also writes a regular trade column for the Journal.
More than half a dozen firms set up new operations at Santa Teresa just in the past two years, including companies from Taiwan, Mexico and the U.S. – all of them focused primarily on trade with Mexico, Pacheco told the Albuquerque Economic Forum Wednesday morning.
“The state’s real export growth is in Santa Teresa, because every time we add a company there, it automatically increases New Mexico’s exports,” Pacheco said. “… We’re leading the nation in export growth to Mexico and the world.”
With pandemic-related trade disruptions slowly but steadily receding, export activity is expected to accelerate even more, said Gov. Michelle Lujan Grisham in an email to the Journal.
“As the global supply chain evolves, domestic and international companies alike are investing in and growing their footprint in New Mexico,” Lujan Grisham said.
Nonstop border growth
Indeed, a lot more expansion is in the works at Santa Teresa, which is currently home to some 70 companies in 2 million square feet of industrial space just north of the Santa Teresa Port of Entry.
Last year alone, developers constructed 750,000 square feet of new facilities, including a 315,000-square-foot “spec” building that Houston-based Blue Road Investments LLC built at Santa Teresa’s Westpark Logistics Center, the newest of four parks operating in the industrial zone.
That spec building – which Blue Road built before actually lining up tenants in anticipation of growing demand for space – is now fully occupied, encouraging the company to break ground in December on another 365,000-square-foot spec building, Pacheco said. And Abyacsa Construction just broke ground on a 135,000-square-foot building, meaning 500,000 square feet of new construction is now underway.
In addition, just south of the border in San Jerónimo, both the computer-assembly firm Foxconn and candy-maker Sunrise Confections are planning major expansions.
Foxconn, which already assembles about 70,000 Dell computers and tablets per day in a 1.5 million-square-foot facility, broke ground in late December on another 1.2 million square feet, Pacheco said. And Sunrise, which operates a 220,000-square-foot plant in San Jerónimo, will expand by another 280,000 square feet this year.
“The new growth is enormous,” Pacheco told the Journal. “If you add the Santa Teresa and San Jeronimo expansions together, it’s nearly 2 million square feet now under construction. That’s the most activity I’ve ever seen here.”
The twin cities
Santa Teresa and San Jerónimo are joined at the hip, with growth on one side directly accelerating growth on the other.
That’s because Santa Teresa-based businesses are primary suppliers of raw materials and components for factories in San Jerónimo, and throughout northern Mexico. They provide everything from copper wire, steel and plastic to electronics and automotive parts.
They also offer warehousing and distribution services for Mexican importers at facilities in the industrial parks.
It’s a “symbiotic relationship,” Pacheco said.
“Our primary goal is to build a binational community along the border,” he said.
Development on both sides is having immense economic impact. Industrial plants in San Jerónimo now employ about 13,500 people.
And Santa Teresa’s industrial parks support about 6,000 jobs, and $1.1 billion in annual economic activity in southern New Mexico and El Paso, according to a recent New Mexico State University study.
“We’re kind of a sleeping giant down there,” Pacheco told the Economic Forum. “We’re bigger than both the state film industry and the New Mexico Spaceport” in terms of economic impact.
And, unlike those other two industries, the border industrial parks are providing high-paying jobs in traditionally low-income communities where manufacturing work is hard to come by.
“We’re not as sexy as the film or space industries, but what we do is ‘meat and potatoes,’ ” Pacheco said. “Companies come to New Mexico, invest in new space and equipment, and hire lots of local employees.”
Infrastructure investment
All the growth is generating more infrastructure development along the border, with $70.7 million in new state and federal funding now earmarked for Santa Teresa.
That money will finance the construction of a new highway parallel to the border, Pacheco said. It will run from Santa Teresa to Sunland Park, offering commercial traffic a fast, direct link with El Paso.
Another $20 million will finance upgrades at the Doña Ana County International Jetport just north of the industrial parks.
“By investing in key infrastructure in the Borderplex, we are creating new jobs and generating additional revenue for the region and the state,” Lujan Grisham said in her email.
Santa Teresa now accounts for nearly 60% of all New Mexico exports. But export-oriented business is growing as well in the mid-Rio Grande corridor and other areas.
Sales of transportation equipment, for example – including civilian aircraft, engines and components – contributed to a combined $319 million increase in exports from New Mexico to Panama, Costa Rica and Singapore last year. And exports to Europe climbed 19% from $308 million in 2020 to $367 million last year.
Sales to China also surged in 2021, up by about $900 million. But, by and large, that reflects the ebb and flow of trade between Intel Corp. in Rio Rancho and its sister facilities in Asia, Pacheco said.