Improvements in the U.S., Texas and Mexico will spur economic growth on the border in 2010.
That is one message that many experts agreed on at McAllen’s 2010 Economic Forecast Summit held on March 30. The Summit was a venue whereby many analysts of the border offered their predictions on how the region will fare as the recession moves into the recovery phase, possibly by this year. And yet opportunities as well as challenges lie ahead for the border economy, according to representatives from the Federal Reserve Bank in Dallas, local bank presidents, as well as experts from the McAllen Economic Development Corporation (MEDC).
“Where else in the world do you have a community where, on the northside of town is the largest market in the world, and the southside of town has labor at $2.40 an hour,” MEDC Executive Director Keith Patridge told attendees in his forecast of the local economy. “That’s the situation we are in right now, and it’s a very attractive message for bringing in companies and investment to our area.”
Experts at the summit predicted that jobs in border MSAs will likely grow from 1 to 4 percent in 2010 as a forecasted improvement in electronics and auto manufacturing will stimulate job growth along the border. Job growth in Texas will likely be between 1 and 2 percent, according to the MEDC.
“We have low cost and greater efficiency for a company,” Patridge said. “What we have is the ability to still make money here, and the opportunity to move to either side of the border based on what has the greater impact on their bottom line.”
The border economy took a hit in 2009 with the current recession, a decline in the value of the peso, which had a big impact on border retail sales, and a Maquila industry that suffered significant losses in auto and electronic manufacturing, according to the MEDC.
About 80 percent of Mexican imports go the U.S., and 90 percent of those are industrial exports, according to the MEDC.
Reynosa saw 4,345 jobs created coupled with a job loss about 2,700 in 2009. McAllen saw the creation of 662 jobs coupled with a loss of 768 during that time.
Despite a lackluster 2009, Famed economist M. Ray Perryman, who was the keynote speaker at the event, predicts the region will emerge as one of the top-5 in the nation to the weather current recession.
Perryman is considered one of the best known economists in Texas. His economic forecasting company based in Waco has been recognized by both the Congress of the United States and the Texas Legislature. He has been honored by The Democracy Foundation for his role in promoting capitalism in mainland China, the Asia and World Institute for his efforts to encourage international academic exchange, and the Systems Research Foundation for his contributions to the field of economics.
Early net job growth, steady employment, and a “healthy set” of banks in the region is piquing the interest of companies, who are looking for an ideal place for low-cost production, Perryman said.
“It’s going to be slow at first. This is going to be a transition year, but I think by the end of this year your going to see a pickup,” Perryman said. “Job growth is coming back. There are a lot of positive things happening here, and there are a lot reasons for that.”