The Roswell economy appears to be doing well despite downturns in the U.S. and world economies, local financial and economic development officials say.
Chaves County and southeastern New Mexico are doing well compared to other places in the United States, said Bob Donnell, executive director of the Roswell-Chaves County Economic Development Corporation.
“I really believe here in Roswell and Chaves County, because of the business diversification that we have right now, I think we’re doing quite well,” Donnell said. “We have a number of businesses that have continued to be successful and profitable through 2008 and have planned expansions and development in 2009.We should really be in good shape this year.”
He mentioned specifically Berken Energy, which set up a plant manufacturing products that use a patent-pending film to produce energy from solar and geothermal heat sources; Sustainable Resources Inc., a Santa Fe-based company that plans to use the facilities at the old desalinization pilot plant east of Roswell to test and develop a kinetic water pump that uses solar energy to desalinate water; and Verety LLC, which established an order-taking call center in Roswell.
Tucson-based Western Emulsions, which produces high-quality asphalt, also is planning to locate a plant in Roswell, and Great Southwest Aviation has purchased the Roswell facility of AARAircraft Services, Donnell noted, adding, “Those alone, in my book, look like they could easily generate maybe as much as 400 jobs for 2009 and early 2010.”
I’m very pleased, considering all that is going on in the U.S. and worldwide,” he added.
Bernarr, Treat, executive director of the Roswell Chamber of Commerce, pointed out that while U.S. unemployment figures for March showed 8.2 percent unemployment, statewide unemployment for March was around 6 percent.
“I don’t know what Roswell’s is, but I think we’re still … somewhere around 4 percent,” Treat said. “I think things are rocking along.”
He mentioned Berken Energy, which he said is “still growing. Their people are ramping up for production.”
Great Southwest’s purchase of AAR Aircraft Services kept those jobs in Roswell, Leprino Foods’ cheese plant is doing well and there are new hotels, a new bank building and a Tractor Supply Co. store is going in, Treat noted.
One of the things the chamber is doing to promote Roswell’s businesses is the Business Showcase, scheduled May 1 at the Roswell Convention and Civic Center.
Booths are in demand for the showcase, but there still are a few available, he said.
“We encourage folks to come out,” he added, describing it as a “business-to-business” showcase “to show other businesses what goods and services everybody else has to offer in our city.”
Local bankers Kenneth Berry, president of Roswell National Bank, and Jon Hitchcock, president of Pioneer Bank, agreed the Roswell economy is doing well.
“I think overall our local economy has been pretty resilient through this whole downturn on a national level, with the exception of decreases in milk prices on the agriculture side and lower oil and gas prices from where we were last year,” Berry said. “Our economy is doing really well, considering all the other factors. We’re not seeing a lot of high unemployment levels” but are seeing “a lot of activity in business and a lot of travel.
“I think hotels probably have seen a little bit of softening as far as percentage occupancy, but really they haven’t had to give much on rates that they’re charging. The restaurants are all full.
“We’re in really good shape for the shape we’re in,” he concluded. “I think we just had such a strong economy going for us as we came into this thing that that momentum has carried us through the first part” of the national downturn “and I think we will be able to maintain, so we won’t see some of the dramatic impacts” other parts of the country have seen. “We’re in really good shape to persevere through this. There is still activity going on, with new construction, new companies look at coming to town. Local banks are seeing good activity, Berry added.
“I know our bank is really doing remarkably well, when you look at what the banking industry per se is going through, being talked about in the media. I think local banks are in good shape. Of course, we didn’t get into the mortgage-backed securities and subprime, that sort of thing.”
He said local banks need to be aware of “pitfalls and challenges out there, but we sure need to recognize the opportunities in our community and make the most of those opportunities.”
Hitchcock noted Pioneer has seen an increase in residential loans over the past year.
“Our residential loan production is up 21 percent over a year ago,” he said. “Obviously, those aren’t all from purchases, but include refinancing, but it speaks to the availability of funds. There’s plenty of money to loan, at very attractive rates, to help consumers increase their disposable income. Rates are very attractive, probably ranging from 4 and one-half (percent) maybe for 10 years to a little over 5 for a 30-year (loan). This could be the last time in my lifetime that we see rates at this level.”
Realtors and mortgage brokers also said their business reflects a strong economy in Roswell.
Home sales in Roswell have done well despite being affected by the nationwide mortgage crisis, according to Jeff Smith, president and CEO of PrimeSource Mortgage Inc.
“I actually think that Roswell has continued to maintain stability in the marketplace, even though we have had some negativity, and I think what negativity there is is to a degree caused by what we’re hearing and seeing” on the national scene.
He said it was frustrating that misdeeds in financial markets in places such as California, Nevada and Florida have caused a tightening in credit markets all over the country.
“Because property values have come down in those three states, New Mexico is having to fight with appraisal issues,” he noted.
“I think that’s why we are so fortunate that we are still keeping the values in our houses and still able to buy and sell. Thankfully, the rates are down to 6 percent or lower and we still have stuff moving around here.”
David Duer, owner of Century 21 Home Planning real estate, said the housing market in Roswell has been up the past 60 days after slowing down from October through February.
For example, Century 21 Home Planning sold 21 houses in January, Duer said, adding he had expected about the same in February, but the agency actually sold 32 in February and 33 in March, for a total of 86 in the first quarter.
By comparison, the agency sold 41 houses in January 2008 and 166 in the first quarter of 2008.
“I think that that is people holding out, and I think people are coming back into the market now,” he said. “With the elections and bad news, people all got scared.”
But now, “it’s going up tremendously,” he said. “We were probably down to about 70 or 80” properties under contract in March. “Right now, we’re sitting at 105 under contract. The number increased by at least 20” compared to March.
He said he thought Century 21 Home Planning should be averaging 125-130 transactions a quarter and should be selling 500-600 homes a year.
He said the subprime problems haven’t affected the Roswell market directly.
“What’s affected us is the people can’t sell their homes and move here like they wanted to,” Duer said. “They’re now under water in their house.”
He said a person could look at how many businesses in other places are laying people off and even shutting down.
“We don’t see any businesses laying off or shutting down” in New Mexico, Duer said. “A lot of companies are still hiring people. Unemployment in New Mexico is probably half of what it is in the rest of the United States. I think that’s a good indicator.”