MCALLEN, Texas – There are pluses and minuses for the McAllen economy in the latest McAllen Area Economic Pulse.
The report is published regularly by the McAllen Chamber of Commerce and its president, Steve Ahlenius, gave his perspective at a meeting of the McAllen Economic Development Corporation’s board of directors meeting for October.
Discussing the July report, Ahlenius said that since the Economic Pulse has been going the nadir was reached in 2009, during the great recession. The Pulse recorded the index at 160.4 during 2009. This July the index stood at 185.8 with the bottom appearing to level out.
“You can see, we were starting to see the trend downwards, slightly, the first couple of months of the year and then COVID hit and you can see the dramatic drop that it has taken,” Ahlenius told the McAllen board.
“The encouraging thing about the pulse is you don’t see what you did in 2009 when it goes all the way down to the bottom in terms of activity.”
Ahlenius then ran through some of the key points.
“Obviously the retail sales is being impacted. Those numbers incorporate not only McAllen but also Mission, Pharr and Edinburg. But then if you look at auto purchases, they have remained relatively healthy compared to what we have seen the last seven months,” Ahlenius said.
“Hotel lodging has obviously taken a huge hit. If you take a look at the lodging receipts you can see for July it was down only 4.4 percent, and that is when the nurses started coming into the Valley. You can see the impact they were having on hotel occupancy.”
As for airline boardings, year to date, they are off dramatically,” the McAllen Chamber president conceded.
Things are looking better though in the housing market.
“Total construction, considering everything that has gone on, to be down about 14 percent is not a bad number. Then you start getting into home permits, home sales, which all have remained positive,” Ahlenius said.
“It is obviously low mortgage rates, a lot of people are refinancing, a lot of good things happening in the real estate market. That has remained fairly strong. If you look at the total volume in terms of home sales, you can see it is up dramatically at close to 44 percent, which speaks well to what’s going on.”
Ahlenius said the value of the peso is worth noting.
“The interesting thing is if you see the peso devaluation against the dollar at 22.42 percent. That normally would be sending shock waves through the economy, here locally, but because of non-essential travelers not being able to travel, you are not seeing the impact that you would have seen with the peso exchange rate to the dollar.”
The employment situation is not looking so good, the McAllen Chamber president explained.
“Obviously in the first month of March and April, dramatic drops in employment and job creation. It has rebounded since then but the bottom line, if you look at this, overall the economic pulse is off by a 4.4 percent, which isn’t bad compared to everything that had gone on during the last six, seven months,” Ahlenius said.
“I think you see some parts of the economy doing well. You see other parts struggling. I think the mayor made reference to where the restaurants are today. Where the hotels are. Obviously, any of that where the business model is based on mass gatherings, or having a large crowd, or the turnover of a large crowd, obviously that has been impacted by the pandemic. But, other parts of the economy continue to do well. So, I think you could have a mixed view of the local economy.”
The mayor Ahlenius was referring to was McAllen Mayor Jim Darling, who also spoke at the MEDC meeting.
The conclusion in the July issue of the McAllen Area Economic Pulse reads:
“The region has been ravaged by COVID and continues to be in many aspects. The economy has shown impressive resilience, however, bouncing back quickly in some indicators when the opportunity presented itself. Obviously, however, aggregate levels of economic activity remain depressed compared to pre-COVID levels and the index remains on the decline. That is especially true in McAllen metro area employment, and it may be some time before the employment situation returns to pre-pandemic levels. The McAllen Economic Index is poised to reverse course and begin to improve, and hopefully that will occur in the coming month or two.”
Editor’s Note: The main image accompanying the above news story shows the McAllen Convention Center. Photo credit: City of McAllen.
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