Sunday, August 28, 2011

Believe it or not: Mexico's eating US lunch in job creation

"Come on Felipay, don't go eating our lunch, man!"
From The Odessa American Online
By M.Ray Perryman

The cultural and economic ties between Texas and Mexico span centuries. Family connections, business relationships and the flow of imports and exports cement these bonds every day. Recent economic news coming out of Mexico has been relatively good, though tales of border violence have overshadowed the more favorable information on most days. Here are a few highlights about the state of the Mexican economy and its importance to the Texas business complex.

The most recent forecasts for the Mexican economy (as reported by the Federal Reserve Bank of Dallas) call for growth in gross domestic product (GDP) for 2011 of 4.3 percent. During the first quarter of this year, expansion (on a year-over-year basis) was 4.6 percent. Industrial production and exports were up recently, though retail sales slipped slightly in May. Job growth continued, though somewhat slower than the rapid pace of the first quarter.

Looking at the pattern in Mexico’s GDP over the past several years brings a couple of things immediately home. First, the recession hit very hard; second, it dissipated very quickly. The index of Mexican industrial production has topped pre-crisis levels, as have wages paid in the formal sector. The nation has added some 280,000 jobs since December.

Millions of people cross the U.S.-Mexico border every year. In fact, data maintained by the Texas Center for Border Economic and Enterprise Development at Texas A&M International University indicate that in 2010, some 14.2 million persons crossed on foot. El Paso and Laredo were the busiest, with McAllen and Brownsville also seeing millions of pedestrians. Clearly, the ties between border cities are strong, with people back and forth on foot on a regular basis. Vehicle traffic counts tell a similar story, with about 20.0 million crossings each way in 2010.

Texas benefits from close ties to Mexico through myriad channels. The ongoing strong recovery in that nation is certainly good news for the Lone Star State, and the violence that threatens to derail it needs to be addressed.

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