New Mexico has solidified its position as a key player in the U.S. energy sector, being the second-largest oil and gas producer in the country. In 2023, the state achieved a remarkable GDP growth of 6.8%, significantly surpassing the national average of 2.9%. This growth was largely fueled by the mining sector, which contributed 4.2 percentage points to the state's GDP, bringing New Mexico's total GDP to $135 billion [b464c2c4].
The state's energy production is impressive, with oil production doubling from 2019 to 2023. In fiscal 2023, New Mexico collected $11.5 billion in oil and gas revenue, underscoring the sector's vital role in the state's economy [b464c2c4]. Furthermore, New Mexico accounted for 14% of the nation's crude oil output in 2023, and the Permian Basin, which spans several counties in the state, produced 29% of all Permian crude oil in the first quarter of 2023 [3784e01a].
Despite these successes, New Mexico faces challenges. The state's population is relatively stagnant, growing only 2.3% from 2010 to 2023, with a current population of approximately 2.1 million. The labor market includes 888,000 nonfarm payroll jobs, and as of August 2024, the unemployment rate stood at 4.1% [b464c2c4]. However, economic disparities persist, with 17.8% of residents living in poverty and a median household income of $60,980 in 2023 [b464c2c4].
Trade also plays a crucial role in New Mexico's economy. The Santa Teresa Port of Entry handled $27.6 billion in trade in 2023, further enhancing the state's economic landscape [b464c2c4]. Additionally, research and development activities have added significant value, exceeding $7 billion in 2021 [b464c2c4].
While the oil and gas sector continues to thrive, there are concerns about the sustainability of this growth. The Permian Basin faces regulatory pressures and environmental campaigns that could impact production levels. Moreover, towns reliant on oil and gas, such as Rangely, Colorado, may experience economic challenges as the industry evolves and shifts towards more sustainable practices [3784e01a][e0e395aa].
In conclusion, New Mexico's economic growth is being driven by its robust energy sector and trade activities. However, to ensure long-term stability and resilience, the state must address economic disparities and prepare for potential shifts in the energy landscape [b464c2c4][3784e01a].