Recent economy of Nogales

This analysis is based in the statistics of INEGI (Instituto Nacional de Estadistica, Geografia e Informatica), in particular in the results of the Economic Census.

Because the field work of the Economic Census of 2005 was undetaken during 2004, when the consequences of one of the downturns of the US economy, that of 2001, were impacting the Nogales maquiladora employment, those statistics are very illustrative to see how that downturn influenced the Nogales economy.

As we can see in the graph above, where I present the Gross Product of Nogales since 1999, the growth of both, manufacture and services, is impressing.

The gross production of the Nogales industry grew, in millions of pesos, between 1999 and 2004, from $2,821 and $5,689.7 million pesos, while Services grew from $1,224.99, to 3,126.3. In other words, the Gross Value of production in Services in Nogales reached, during 2004, 55% of the industrial production. This is, obviously, a repercussion on the maquila by the US economic downturn.

But this is not the only way to see the behavior of the Nogales economy. A more important parameter to see the productivity is the Added Value, or how much the value of the local production increased .

If we take as a parameter the Value Added to the local production among the three sectors of economic activity: Services, Manufacture and Trade during these same years, we get the following graph:

 

In it, we see that in Industry the Value Added grew, in million pesos, from $2,821 to $3,370; while Services grew from $692.8 to $1,929. In other words, we have seen during these five years almost a threefold increase of the Value Added in Services.

Another very illustrative way to measure the economy is the Occupied Personnel, which in the same three sectors was as follows:

This graph tells us that many of those who lost their employment in manufacture as a consequence of the economic downturn, moved to Services during 2004.

While Industry had been losing numbers in employment starting in 2001, until it reached a minimum of 25,660 in 2003, and only during 2004 it recuperated to 29,128; on the other side, employment in Services grew between 1999 and 2004 from 7,865 to 13,877. In other words, during 2004 we had emploment in Services exactly half of those employed in the Maquiladora Industry.

Unfortunately, the Economic Census are undertaken every five years, so we will have to wait until we can know how the economy has behaved during this time.

(Note added on June 2009): The current global economic crisis will, of course, also impact the results of the 2005 Economic census.