Economy of New Mexico facts for kids

Kids Encyclopedia Facts
Economy of New Mexico
2008 NM Proof.png
Statistics
GDP $94.8 billion
GDP per capita
$45,465 (based on estimated 2015 population of 2,085,109)
Population below poverty line
17.1%
0.453
Labor force
934,200
Unemployment 6.6%
Public finances
Revenues $4,413.988 million
Expenses $6,080 million

Oil and gas production, tourism, and federal government spending are important drivers of New Mexico's economy. State government has an elaborate system of tax credits and technical assistance to promote job growth and business investment, especially in new technologies.

In 2014 New Mexico's Gross Domestic Product was $94.8 billion.

In 2014 the per capita personal income was $45,465 (rank 37th in the nation).

In 2005 the percentage of persons below the poverty level was 18.4%. The New Mexico Tourism Department estimates that in Fiscal Year 2006 the travel industry in New Mexico generated expenditures of $6.5 billion.

Energy

Further information: Solar power in New Mexico

New Mexico is rich in fossil fuel and alternative energy resources. Major petroleum and natural gas deposits are located in the Permian Basin in southeast New Mexico and in the San Juan Basin in the northwest. The San Juan Basin Gas Area is the largest field of proved natural gas reserves in the United States. According to the Energy Information Administration, State crude oil output is typically just over 3 percent of the annual U.S. total, and natural gas output is nearly 10 percent of the U.S. total. New Mexico also contains major coal deposits in the northwest corner of the State. Nine tenths of electricity production in the State is from coal-fired plants. Much of New Mexico's geologically-active Rocky Mountain region holds geothermal power potential, and pockets of the State are suitable for wind power development. New Mexico's southern deserts offer the State's most concentrated solar power potential.

The Waste Isolation Pilot Plant (WIPP) is located in the Delaware Basin, and is used to store nuclear waste.

New Mexico Wind Generation (GWh, Million kWh)
Year Total Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec
2009 1,547 142 149 163 145 108 90 94 123 95 163 133 140
2010 1,832 156 94 168 199 193 139 102 120 136 144 182 199
2011 2,089 183 186 210 248 235 203 118 92 113 159 196 145
2012 219 213 220 193 194

Source:

Manufacturing

Industrial output, centered around Albuquerque, includes electric equipment; petroleum and coal products; food processing; printing and publishing; and stone, glass, and clay products. Defense-related industries include ordnance. Important high-technology industries include lasers, data processing, solar energy and semiconductors.

Government and Military

Federal government spending is a major driver of the New Mexico economy. In 2005 the federal government spent $2.03 on New Mexico for every dollar of tax revenue collected from the state. This rate of return is higher than any other state in the Union. The federal government is also a major employer in New Mexico providing more than a quarter of the state's jobs.

Many of the federal jobs relate to the military; the state hosts three air force bases (Kirtland Air Force Base, Holloman Air Force Base, and Cannon Air Force Base); a testing range (White Sands Missile Range); and an army proving ground and maneuver range (Fort Bliss – McGregor Range).

In addition to the National Guard, New Mexico has a New Mexico State Defense Force. Other minor locations include the New Mexico Army National Guard Headquarters in Santa Fe county and the National Guard Armory in far northern Rio Rancho in Sandoval county.

Other federal installations include national observatories and the technology labs of Los Alamos National Laboratory (LANL) and Sandia National Laboratories (SNL). SNL conducts electronic and industrial research on Kirtland AFB, on the southeast side of Albuquerque. These installations also include the missile and spacecraft proving grounds at White Sands. Other federal agencies such as the National Park Service, the United States Forest Service, and the United States Bureau of Land Management are a big part of the state's rural employment base.

Tourism and Retirement

Virgin Galactic, the first space tourism company to develop commercial flights into space, has decided to put its world headquarters and mission control at Spaceport America in Upham, New Mexico (25 miles (40 km) south of Truth or Consequences); Virgin Galactic had its inaugural launch of the VSS Enterprise spaceship in 2008, and has begun launching ordinary citizens since early 2009.

The New Mexico Tourism Department estimates that in Fiscal Year 2006 the travel industry in New Mexico generated expenditures of $6.5 billion.

The private service economy in urban New Mexico, especially in Albuquerque, has boomed in recent decades. Since the end of World War II, the city has gained an ever-growing number of retirees, especially among armed forces veterans and government workers. It is also increasingly gaining notice as a health-conscious community, and contains many hospitals and a high per capita number of massage and alternative therapists. The warm, semiarid climate has contributed to the exploding population of Albuquerque, attracting new industries to New Mexico. By contrast, many heavily Indigenous American and Hispanic rural communities remain economically underdeveloped.

Film and television

Further information: Category:Films set in New Mexico and Category:Films shot in New Mexico

Feature films have used New Mexico as a location since The Indian School in 1898. Financial incentives and construction of facilities (such as The Albuquerque Studios) have created opportunities for locally based crew members with production reaching an all-time high in 2007. As of the end of August 2007, 30 major projects have been filmed in the state, more than in any other calendar year in history. The New Mexico Film Office assists the industry in coming to and filming in the state.

In 2011 the state placed a cap of $50 million on tax credits for the film industry. The cost of funding the incentive soared from just $3.4 million in 2004 to $76.7 million in 2009.

Facilities

Garson Studios is an established film production facility is on the campus of Santa Fe University of Art and Design that has helped turned out many feature-length films with its soundstage and high tech equipment.

Film and television post-production is also growing.

Economic incentives

New Mexico provides a number of economic incentives to businesses operating in the state, including various types of tax credits and tax exemptions. Most of the incentives are based on job creation.

New Mexico law allows governments to provide land, buildings, and infrastructure to businesses to promote job creation. Several municipalities have imposed an Economic Development Gross Receipts Tax (a form of Municipal Infrastructure GRT) that is used to pay for these infrastructure improvements and for marketing their areas.

The state provides financial incentives for film production. The New Mexico Film Office estimated at the end of 2007 that the incentive program had brought more than 85 film projects to the state since 2003 and had added $1.2 billion to the economy.


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