July 1 – Netflix recently expanded its studio in Albuquerque, and Land of Enchantment’s presence on the big and small screens has made the state famous around the world.
A New Mexico Film Office study found that a tax credit for New Mexico’s film industry generated an estimated total economic output of $3.8 billion from fiscal year 2020 through fiscal year 2023.
However, a fiscal year 2022 Legislative Finance Committee report found that film incentives were nearly 10 times larger than the next largest economic development tax incentive, and that film incentives were twice as large as all other economic development tax incentives combined.
The report also shows that tax benefits through the Film Production Tax Credit could grow 171% over the next five years, from $100.2 million in FY 2023 to $272.1 million in FY 2028.
New Mexico’s outdoor recreation economy accounted for 1.9%, or $2.4 billion, of the state’s gross domestic product last year. Employment in the state — which includes a mix of full-time, part-time, seasonal and temporary jobs — grew 7% to about 28,000.
New Mexico is also in the midst of ongoing national efforts to “re-shore” chip production and other types of advanced manufacturing to reduce dependence on Asian countries, where most chips are now made, especially given supply chain issues caused by the global pandemic. Intel this year opened Fab 9, a chip manufacturing facility in Rio Rancho that required a $3.5 billion investment.
Dependence on the government
USA Facts, which compiles financial information from numerous sources, said that in the third quarter of 2023, New Mexico’s real GDP was $130.3 billion in goods and services, which marked an increase of 5.7% annually from the previous quarter. That ranked New Mexico 13th in the nation in how quickly its economy grew.
During that same quarter, New Mexico’s GDP accounted for 0.47% of total U.S. GDP, making New Mexico the 14th smallest economy in the country, according to USA Facts.
The same organization found that New Mexico is one of the states most dependent on the federal government, which accounts for about 30% of the state’s total revenue.
Part of that is because the state’s national labs are large employers. New Mexico is home to Los Alamos National Laboratory, Sandia National Laboratories and two Air Force Research Laboratory directorates. Rob Black, the president and CEO of the New Mexico Chamber of Commerce, said the Brackish Groundwater National Desalination Research Facility in Alamogordo could also be considered a national laboratory.
“I tend to think that’s a positive,” Black said. “Those are all things that we can draw upon that really give us a unique, competitive space. Part of how that drives (the economy), for example, New Mexico (Institute of Mining and Technology) has a cybersecurity program that’s really second-to-none… Because there’s a national security component that’s directly tied to those labs.”
Mark Benak, the president of the Sandia Foundation who completed a Harvard Leadership Initiative researching New Mexico’s economy, said the state must find ways to collaborate among industry associations, accelerators and incubators, among other economic factors.
Benak moved to Albuquerque 30 years ago to help found a company with a CEO who leveraged intellectual property from a partnership between Sandia and the University of New Mexico.
“I didn’t realize that until much later,” he said. “…It was an interesting mix of academic and national labs, as well as the private sector.”
Exports
New Mexico exports significantly more goods than it did a decade ago.
In 2023, New Mexico’s exports were valued at $4.9 billion, an increase of 81% from 2013. According to the Office of the US Trade Representative, exports accounted for 3.8% of the state’s GDP.
According to the Trade Representative’s Office, Mexico was the state’s largest export market, with 70 percent of New Mexico’s goods exported to Mexico.
According to the Observatory of Economic Complexity, New Mexico’s top exports were data processing parts and accessories, aircraft parts and semiconductor media.
