Arizona-Mexico Economic Indicators Monitoring Arizona’s Performance Presented at the OneBorder Meeting March 10, 2017 George Hammond, Director, EBRC AZMEX Team Vera Pavlakovich-Kochi, Ph.D., Senior Regional Scientist Maile Nadelhoffer, Senior Research Economist and Webmaster Alan Hoogasian, Research Economist WELCOME. THANK YOU FOR GIVING ME SOME TIME TO TALK TO YOU ABOUT ARIZONA’S TRADE PERFORMANCE. AS I DO THAT, I’LL ALSO GIVE YOU A TOUR OF A NEW RESOURCE THAT YOU CAN USE TO KEEP UP WITH THE LATEST DATA: AZMEX ECONOMIC INDICATORS WEBISTE. ARIZONA’S EXPORT PERFORMANCE HAS BEEN A BIT OF A BRIGHT SPOT FOR THE STATE ECONOMY DURING THE PAST COUPLE OF YEARS. IN FACT, IN 2014, AZ MERCHANDISE EXPORTS ROSE AT ROUGHLY TRIPLE THE US RATE, DRIVEN IN LARGE PART BY A SURGE OF EXPORTS TO MEXICO. WE SAW ANOTHER INCREASE IN EXPORTS IN 2015, UP 6.3%, IN CONTRAST TO A DECLINE FOR THE US (AND TEXAS). LET’S START WITH THE WEBPAGE.

Explore data for border economies. Arizona-Mexico Economic Indicators azmex.eller.arizona.edu University of Arizona / Eller College of Management

LET’S TALK ABOUT BORDER TRADE FIRST. THE SITE CONTAINS DATA ON MERCHANDISE EXPORTS AND IMPORTS FROM US BORDER STATES MEXICO AND CANADA. NOTE THE TABLE: ARIZONA MERCHANDISE EXPORTS TO MEXICO TOTALED $9.2BILLION IN 2015, WITH MEXICO THE STATE’S LARGEST EXPORT DESTINATION BY FAR. IT ACCOUNTED FOR JUST OVER 40% OF AZ EXPORTS LAST YEAR. WE’LL ALSO SHOW YOU GRAPHS OF THE MAJOR TRENDS, SO LET’S LOOK AT A COUPLE OF THOSE. University of Arizona / Eller College of Management

Arizona Exports To Mexico Level And Growth Rate FIRST, ARIZONA’S MERCHANDISE EXPORTS TO MEXICO HAVE BEEN RISING AT AN ACCELERATING RATE DURING THE PAST COUPLE OF YEARS. NOTE THAT OUR EXPORTS TO MEXICO ROSE BY ROUGHLY 22.2% IN 2014 AND 6.3% LAST YEAR. MUCH OF THE STRENGTH IN 2014 WAS DRIVEN BOTH BY EXPORTS OF MINERALS AND ORES (COPPER) AND MANUFACTURING EXPORTS. THOSE SECTORS CONTINUED TO INCREASE IN 2015, BUT AT A SOMEWHAT SLOWER PACE. THIS GRAPH EMPHASIZES LR TRENDS WITH ANNUAL DATA……WE ALSO PROVICE MONTHLY DATA SO YOU CAN SEE THESE TRENDS EMERGE.. University of Arizona / Eller College of Management

Mexico/U.S. Foreign Exchange Rate FIRST, ARIZONA’S MERCHANDISE EXPORTS TO MEXICO HAVE BEEN RISING AT AN ACCELERATING RATE DURING THE PAST COUPLE OF YEARS. NOTE THAT OUR EXPORTS TO MEXICO ROSE BY ROUGHLY 22.2% IN 2014 AND 6.3% LAST YEAR. MUCH OF THE STRENGTH IN 2014 WAS DRIVEN BOTH BY EXPORTS OF MINERALS AND ORES (COPPER) AND MANUFACTURING EXPORTS. THOSE SECTORS CONTINUED TO INCREASE IN 2015, BUT AT A SOMEWHAT SLOWER PACE. THIS GRAPH EMPHASIZES LR TRENDS WITH ANNUAL DATA……WE ALSO PROVICE MONTHLY DATA SO YOU CAN SEE THESE TRENDS EMERGE.. University of Arizona / Eller College of Management

NEXT UP IS BORDER CROSSINGS, WHICH INCLUDES ALL THE VARIOUS KINDS OF LEGAL CROSSERS. THE DATA ONLY COVERS NORTHBOUND TRAFFIC. BUSES PEDESTRIAN PERSONAL VEHICLE PERSONAL VEHICLE PASSENGERS TRAIN TRUCK University of Arizona / Eller College of Management

Personal Vehicle Passengers By Arizona Border Port Of Entry JUST TO GIVE YOU ONE EXAMPLE, LET’S LOOK AT PERSONAL VEHICLE PASSENGER CROSSINGS. THIS HAS REBOUNDED DURING THE PAST COUPLE OF YEARS, AFTER SEVERAL CONSECUTIVE YEARS OF DECLINE. INDEED, IN 2014, PERSONAL VEHICLE PASSENGER CROSSINGS AT ALL AZ BPOE ROSE BY 5.9%. EVEN SO, CROSSINGS OF THIS TYPE REMAIN WELL BELOW PEAK LEVELS EARLY IN THE PREVIOUS DECADE. THIS DATA IS ALSO DISAGGREGATED BY INDIVIDUAL PORT, SO WE CAN SEE THAT NOGALES HANDLES THE MOST CROSSERS FOLLOWED BY SAN LUIS. TRENDS IN PERSONAL VEHICLE PASSENGERS TENDS TO BE INFLUENCED BY SOCIAL AND ECONOMIC TIES BW AZ AND SONORA, AS WELL AS BY SECURITY PROCEDURES AT THE BORDER. University of Arizona / Eller College of Management

THE SITE ALSO FEATURES COMMODITY FLOW DATA, WHICH TRACKS TRADE THROUGH ARIZONE PORTS, NO MATTER WHERE THE GOODS ORIGINATE. FOR INSTANCE, AZ HAD THE LARGEST VALUE OF MERCHANDISE FLOWING THROUGH OUR BPOE IN 2015, FOLLOWED BY CALIFORNIA. MICHIGAN WAS THIRD, DUE TO THE IJMPORTANCE OF AUTO PARTS. THIS IS DESIGNED TO GIVE A SENSE OF HOW ARIZONA PORTS ARE DOING RELATIVE TO THOSE IN OTHER BORDER STATES. THUS YOU CAN FIND DATA HERE THAT SHOWS AZ BPOE BY INDIVIDUAL PORT AND BY SELECTED PORT FOR OTHER US BORDER STATES. University of Arizona / Eller College of Management

Nogales District As Share Of All Southern BPOE U.S. Exports To Mexico Nogales District As Share Of All Southern BPOE THIS GRAPH SHOWS EXPORTS THROUGH AZ PORTS AS A SHARE OF EXPORT THROUGH ALL SOUTHERN BPOE (INCLUDE TX, NM, AND CA). OVERALL, AZ PORTS HAVE BEEN DOING BETTER LATELY, AFTER LOSING MARKET SHARE DURING THE GREAT RECESSION. University of Arizona / Eller College of Management

IN TERMS OF THE ECONOMY, WE HAVE A VARIETY OF DIFFERENT INDICATORS, INCLUDING OUTPUT MANUFACTURING PERFORMANCE PATENTS EDUCATIONAL ATTAINMENT University of Arizona / Eller College of Management

Total IMMEX Employment Sonora - INEGI ONE COOL INDICATOR ON THE SITE IS IMMEX EMPLOYMENT. THIS MEASURES EMPLOYMENT AT MAQUILADORA PLANTS IN MEXICO. NOTE THE GENERAL UPWARD TREND IN SONORAN IMMEX JOBS SINCE THE END OF THE DOWNTURN. THEY CONTINUE TO RISE, WITH GROWTH LAST YEAR OF 3.6%. THAT WAS A BIT SLOWER THAN THE 5.7% GROWTH RATE POSTED FOR ALL MEX BORDER STATES OF 5.8%. University of Arizona / Eller College of Management

WE ALSO HAVE SOME DATA FOR FOREIGN DIRECT INVESTMENT FLOWING INTO MEXICAN STATES. WE ARE INVESTIGATING DATA FOR INWARD INVESTMENT INTO US STATES, BUT HAVENT ADDED IT TO THE SITE AT THIS POINT. University of Arizona / Eller College of Management

Foreign Direct Investment Mexico Border States Foreign Direct Investment IN 2014, THE DATA SHOWS THAT MEX ATTRACTED $28 BILLION, WITH ABOUT 30% GOING TO MEXICAN STATES ALONG THE US BORDER. NOTE THAT THE BIGGEST FLOWS IN 2015 WENT TO CHIHUAHUA AND NUEVA LEON. NUEVO LEON AND TO CHIHUAHUA BOTH CLOSE TO TEXAS University of Arizona / Eller College of Management

Comprehensive annual report summarizing the main findings from the data. WE ALSO HAVE INDICATORS OF POPULATION, MOST OF WHICH YOU’VE SEEN BEFORE University of Arizona / Eller College of Management

Share the latest data for border economies Share the latest data for border economies. Arizona-Mexico Economic Indicators Quarterly Update WE ALSO HAVE INDICATORS OF POPULATION, MOST OF WHICH YOU’VE SEEN BEFORE University of Arizona / Eller College of Management