Major Industries and Commercial Activity
The largest city in New Mexico, Albuquerque is also its economic center; it accounts for nearly half of the state's economic activity. Part of its success can be attributed to a diverse economic base consisting of government, services, trade, agriculture, tourism, manufacturing, and research and development. In 2004 Forbes magazine ranked Albuquerque the 12th best city in the nation for doing business.
The Rio Grande River valley contains rich farm and pasture lands that support a sizable food industry, based mainly on fruit and produce, in the Albuquerque area. Since its early years as a stop on the Santa Fe Trail, the city has been a transportation and service center. Albuquerque is also home to more than 700 manufacturing firms—many of them located in well-planned industrial parks—that produce such goods as trailers, food products, electronic components, neon and electric signs, hardware, and machine tools. Among the major manufacturing firms that call Albuquerque home are Intel, GE, and General Mills.
The Rio Grande Research Corridor, a constellation of high-technology industries, sprang up in the wake of the development of nuclear research during and after World War II. Each year, more than $4 billion is spent on research and development in the region. The area's major employers are part of this complex. Sandia National Laboratories, a government research and development lab, is involved in laser technology and solar energy. Kirtland U.S. Air Force Base, the area's largest employer and the sixth-largest military base in the world, is a weapons research center. In 2004, the value of the base's economic impact to Albuquerque was $3.3 billion.
For nearly a century people have valued Albuquerque for its dry air, which is especially beneficial to those with respiratory problems. Today the city's medical services and facilities are a vital part of the local economy. The year-round sunny weather attracts pleasure seekers as well; more than four million tourists visit Albuquerque each year, to ski the Sandia Mountains and to absorb the city's rich ethnic heritage.
Items and goods produced: machine tools, fabricated structural steel, furniture, hardware, textiles, paints, varnishes, fertilizers, scientific instruments, electronic equipment, neon and electric signs, native American jewelry and curios
Incentive Programs—New and Existing Companies
Among the factors that draw businesses to Albuquerque are the city's extraordinarily low cost of living (based on cost of labor, energy, taxes, and office space), which in 2004 was ranked the lowest of all U.S. cities; and its highly-educated workforce.
The Albuquerque Economic Development group (AED), is a private, nonprofit organization that recruits companies to the Albuquerque area. AED provides site-selection assistance, labor market analysis, business incentive analysis, workforce recruitment and job-training assistance, and coordination of state and local assistance, among other services. Many high technology activities are carried out in Albuquerque; Technology Ventures Corporation, a non-profit organization, serves as a bridge between the public and private sectors for the commercialization of technologies developed at the national labs and research universities there, and assists in the expansion of existing businesses.
New Mexico offers a variety of incentives to all new and expanding businesses. Its Build to Suit program facilitates building construction, and ePort New Mexico is a one-stop information source offering permitting and licensing. The state's financial incentives include: no inventory taxes; tax credits for high-wage jobs, technology jobs, and childcare; a tax deduction for research and development services; a job training incentive program (the cornerstone of the state's incentives, allowing New Mexico to pay half the salary for new hires for up to half a year); exemptions for qualified businesses from property taxes on land, buildings, and equipment, and from personal property tax on equipment; and laboratory partnerships with small businesses. Further incentives are available for manufacturers, customer support centers, aerospace and aircraft industries, producers of agriculture or energy, and filmmakers. In addition, the state enacted a major personal income tax reduction in 2003, and New Mexico's property taxes are second lowest in the nation.
Economic Development Information: Albuquerque Economic Development, University Center Research Park, 851 University Boulevard SE, Suite 203, Albuquerque, NM 87106; telephone (505)246-6200
Among the many businesses that have located or expanded in Albuquerque in the early 2000s are: Gap, Inc., which opened a corporate shared services center in 2001; Victoria's Secret Catalog, which expanded its support center in 2001, adding 380 jobs; Blue Cross/Blue Shield, which expanded in 2002, adding 500 jobs; ClientLogic, a customer service and technical support center for high-technology companies, which expanded in 2002-2003, adding 500 jobs; Tempur-Pedic Mattress, which broke ground on a $56 million manufacturing plant in 2004; and Eclipse Aviation, a personal jet manufacturer undergoing an expansion slated for completion in 2007, expected to add 300 jobs. The $73 million Alvarado Transportation Center Project is partially completed and operational as of 2005; by 2006 it will be an intermodal transportation center linking commercial and city/state bus and rail services.
Since the days of the Santa Fe Trail, Albuquerque has been an important center for the transportation of goods. The city's economy benefits from the Santa Fe Railway and the 46 motor freight carriers, 29 of which have local terminals, that link Albuquerque with major markets throughout the country.
New Mexico is a Freeport State, meaning that business inventories for resale, raw materials, and interstate commerce products stored there temporarily are not subject to state or local property taxes. Albuquerque offers an international airport, Albuquerque International Sunport, with a port of entry from Mexico; the airport moves approximately 146 million tons of freight cargo annually. Foreign trade zones operate in Albuquerque and nearby Rio Rancho.
Labor Force and Employment Outlook
Employment growth in Albuquerque in 2004 was 2.4 percent. Growth of around 1.5 percent is anticipated for 2005 and 2006. The city's labor force is relatively young, skilled, and educated: Albuquerque is notable for its high percentage of advanced degree holders. Albuquerque's work force is routinely cited for its productivity, and Area Development Magazine recently ranked the city number one in the nation, for manufacturing productivity in terms of dollars of output per worker.
The following is a summary of data regarding the Albuquerque metropolitan area labor force, 2004 annual averages.
Size of non-agricultural labor force: 370,800
Number of workers employed in . . .
construction and mining: 25,800
trade, transportation and utilities: 66,200
financial activities: 19,200
professional and business services: 59,200
educational and health services: 45,200
leisure and hospitality: 36,300
other services: 11,900
Average hourly earnings of production workers employed in manufacturing: $14.64
Unemployment rate: 4.9% (January 2005)
Cost of Living
The following is a summary of data regarding key cost of living factors for the Albuquerque area.
2004 (3rd Quarter) ACCRA Average House Price: $256,100
2004 (3rd Quarter) ACCRA Cost of Living Index: 100.8 (U.S. average = 100.0)
State income tax rate: Ranges from 1.7% to 6.8%
State sales tax rate: 5.0%
Local income tax rate: None
Local sales tax rate: 0.5625% (city); 1.1875% (county)
Property tax rate: Residential, 27.027 to 43.860 mills; non-residential 32.857 to 51.724 mills (2004)
Economic Information: Greater Albuquerque Chamber of Commerce, PO Box 25100, Albuquerque, NM 87125; telephone (505)764-3700; fax (505)764-3714. New Mexico Department of Labor, Economic Research and Analysis, 401 Broadway NE, Albuquerque NM 87102
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