Analysis finds pandemic didn't prevent business openings, reopenings in NM
Establishment "births" nearly offset number of business closures
FARMINGTON − As expected, the COVID-19 pandemic had a significant negative impact on the state's business community, forcing many merchants to close their doors permanently or temporarily.
But, according to an analysis released last week by officials at the New Mexico Department of Workforce Solutions, a surprising number of New Mexico businesses opened or reopened during that same period.
The June edition of the New Mexico Labor Market Review released July 29 by the department showed that thousands of businesses were launched or reopened during the pandemic, helping mitigate its impact on the state's economy.
"It has been assumed that very few businesses opened during the pandemic, but the data reflects otherwise," bureau chief Rachel Moskowitz writes in her article "How Many New Mexico Businesses Opened and Closed During the Pandemic?" that is part of the monthly review.
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That data presented in her analysis were compiled by the U.S. Bureau of Labor Statistics.
Moskowitz citess figures that show the average number of establishment "births" − businesses that opened or reopened − per quarter in New Mexico from 2011 to 2019 was 1,317.
"In the first full quarter that coincided with the pandemic, 1,215 new businesses opened," she writes. "Although this figure was lower than the historical quarterly average, all subsequent periods showed a higher number of openings than the historical pre-COVID quarterly average. In the third quarter 2021, the most recent data available, there were 2,135 establishment births, 818 more openings than the quarterly pre-COVID average."
Moskowitz writes that the number of establishments that reopened after being temporarily closed peaked in the third quarter of 2020 at 2,434 − 1,403 higher than the pre-COVID quarterly historical average of 1,031.
Even so, the pandemic did take a significant toll on the state's business community, according to the figures presented in the analysis. Moskowitz writes that from the second quarter of 2020 to the third quarter of 2021, 18,589 private establishments opened in New Mexico, but 19,159 closed for a net loss of 570 establishments. The hardest-hit industry in that time was retail trade, which suffered a net loss of 228 businesses.
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The second quarter of 2020 was the low point for businesses in New Mexico, as 2,834 establishments temporarily closed in that three-month period – a figure more than two and a half times the pre-COVID quarterly average of 1,036, according to the analysis. The fourth quarter of that year also was bleak, as 2,350 temporary closures were registered.
Moskowitz cautions readers that the figures used in the analysis are preliminary and that the final number of establishments closed because of COVID-19 likely won't be known for several more months.
"But most likely, the number will increase once 2021 data becomes available," she writes. "Estimates may also be low because business loans and assistance programs such as the Paycheck Protection Program (PPP) may have lessened, or temporarily halted, the number of establishments that closed."
Youth employment examined
A separate article by economist Julie Larranaga in the same edition of the review examines the presence of people ages 16 to 24 in the state's workforce using data culled from the U.S. Census Bureau's 2016-2020 American Community Survey's five-year estimates.
People in that age range make up 12.2% of New Mexico's population and 11.9% of the U.S. population, according to the article. In San Juan County, that figure is 11.7%, slightly less than the national rate.
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A county-by-county breakdown in New Mexico shows that only 18.9% of San Juan County residents ages 16 to 19 were employed, a figure that trails the New Mexico (25.2%) and U.S. (28.2%) averages. The percentage of young people ages 20 to 24 who were unemployed in San Juan County was 12.9%, which also was higher than the state (11%) and national (9.6%) averages.
A breakdown of the education level achieved by San Juan County residents ages 18 to 24 shows that only 8.6% of those young people have earned at least an associate college degree, a figure that ranks near the middle of the pack for the state.
Mike Easterling can be reached at 505-564-4610 or email@example.com. Support local journalism with a digital subscription: http://bit.ly/2I6TU0e.