State of Chihuahua Falls in Economic Rankings

Our neighboring state to the south, Chihuahua, has slipped among Mexican states, from sixth place in gross state product in 2006 to eleventh place in 2007. In absolute terms economic production, according to a recent report by INEGI, the official Mexican statistical agency, fell by 1.35% during that year, to $371 billion pesos. Using the current exchange rate of 13.159 pesos per dollar this would translate to about $24.1 billion U.S. This compares with New Mexico's gross state product in 2007 of $75.2 billion U.S.

Chihuahua has a population of about 3.5 million, compared to New Mexico's 2 million. New Mexico's per capita income in 2007 was estimated at $30,706. Using the exchange rate conversion, per capita income in Chihuahua would be about $7531, about one fourth as much.

However, since the cost of living is lower in Mexico, economists have estimated a "purchasing power parity" (PPP) to adjust for this factor. In 2005 the PPP for Mexico was estimated at .69 by the World Bank. This would mean Chihuahuans had a purchasing power per capita equivalent to $10,915 U.S., compared to the New Mexico per capita income figure of $30,706. Adjusting for gross state product, this would raise gsp for Chihuahua from $24.1 billion (U.S.) to about $34.9 billion (U.S.), still less than half that of New Mexico.

While a per capita income equivalent to about $11,000 is not high, there are communities in New Mexico where per capita incomes are lower. Sunland Park, in Dona Ana County, for example has an income per capita that I estimate at about $9260 in 2007. I estimated this by assuming that the per capita income in Sunland Park grew in proportion to the growth in per capita income estimated by the Census Bureau for Dona Ana County as a whole between 2000 (the last year per capita incomes were tabulated for Sunland Park) and 2007. Using the same assumptions the per capita income of Vado in 2007 was about $8903, Mesquite was about $10,039, and Anthony was about $9398--all three of these communities are also in the South Mesilla Valley of Dona Ana County.

The maquila industry began to falter in 2007 in Chihuahua, accounting for some of the decline. I would expect the decline to get worse when the numbers for 2008 and 2009 come out, since Chihuahua has been more negatively affected by the recession in the U.S. than other states in Mexico, and, given that Cd. Juarez has about half the population of the state, there will almost certainly be a drop in production due to the public security crisis, the swine flu crisis, and a decline in the maquila sector.