With a maquila recovery well underway, the three-state region encompassing Chihuahua, Mexico; southern New Mexico and west Texas stands to benefit from increased manufacturing and trade.

      Ciudad Juárez is a prime maquiladora location, providing about one-fifth of the nation’s overall maquila employment. More than 70 of the maquiladora plants in Juárez are owned by Fortune 500 corporations and among these facilities are telecommunications, electronic assembly plants, clean room manufacturing for medical supplies, consumer appliances, and automotive industry manufacturing. A growing percentage of employment generated by maquilas here has been in technical and administrative positions rather than direct labor.

      El Paso derives significant economic benefit from the Juárez maquila industry, including a payroll of $247.8 million for maquila employees who live on the U.S. side of the border. In addition, the production-sharing sector of the border economy has attracted companion industries to the area with the maquila industry purchasing $1.6 billion worth of services in El Paso. The industry has generated jobs in El Paso in indirect support industries including retail sales, manufacturing support services, professional support services, transportation, banking and home building.

      Juárez is the largest production-sharing center in North America, with more than 290 maquilas employing a total of more than 206,000 workers. The state of Chihuahua has more than 400 maquila operations employing 272,749 people. Today, about 20 percent of Mexico’s total production sharing output is manufactured in Juárez.

      Juárez, with its $21 billion economy, is the largest city in the three-pronged borderplex, an area that consists of El Paso, Juárez and three counties in Southern New Mexico. This area has a Gross Regional Product exceeding $41 billion, ranking it among the 15 largest metropolitan areas in the United States.

      The community’s success is directly related to its globally unique socio-economic resource base. Juárez is a world-class manufacturing center with highly skilled, productive labor. El Paso is a world-class logistics center providing excellent rail, air and truck transportation to global markets. New Mexico is home to the major U.S. research laboratories and their applied technology resources. Given this base, there is no community in the world that is better positioned for high technology, manufacturing in support of North American and global industries.

      The community offers a full range of transportation and logistical support. There are three major commercial ports of entry: Zaragoza (east), Cordova (central) and Santa Teresa (west). There is a Dedicated Commuter Lane (DCL) at the Lerdo/Stanton Street Bridge. This international facility reduces plant-to-home driving time to less than 30 minutes.

      Juárez has excellent air, rail and truck transportation system. There are three commercial airports: Juárez International Airport, El Paso International Airport and the Santa Teresa Airport. The Juárez Airport provides extensive air services to Mexico’s national markets including Chihuahua City, Monterrey, Tijuana, Torreon and Mexico City. The El Paso Airport provides direct flights to Los Angeles, Denver, Chicago, Dallas, Houston and other major U.S. communities. El Paso’s new airfreight terminal is the 35th largest service provider for airfreight in the United States. Santa Teresa airport handles only airfreight and private aircraft.

      Air freight service within the area is offered by companies such as Federal Express, Mach 1 Air Services, UPS, Airborne Express, Burlington Air Express and the U.S. Postal Service, Aeromexpress, and Redpack.

      Rail and trucking services are extensive. There is an association of transport services in Juárez with more than 40 members that provides trucking services within Mexico and to the United States. The Union Pacific Railway provides intermodal and other services for its mainlines to Los Angeles, Chicago and Dallas. The Burlington Northern/Santa Fe Railroad provides similar services to Los Angeles and Chicago. Rail service to major west and Midwest markets takes less than 18 hours. In Mexico there is mainline service to Chihuahua, Mexico City and other markets.

El Paso

      Over the next few years, El Paso will experience a continued decline in the apparel and textile industry, but this should be offset by growth in manufacturing operations in two other areas: those that are part of the maquila process, and growth in higher value-added companies that are attracted to the assets that El Paso has to offer. Partly resulting from activity in Juárez, job growth in sectors such as rubber and plastics, electronic equipment, and transportation equipment has grown at annual rates of over 6 percent since 1996. These trends are expected to continue.

  The growing cross border trade associated with NAFTA and the maquilas has brought additional opportunities for El Paso manufacturers. Suppliers from the interior United States send hundreds of trucks to Juárez with parts and machinery for the maquilas. On the back haul, the trucks often return with empty loads. This abundance of trucks departing the El Paso/Juárez area has driven down the rates on shipments leaving El Paso for locations across the United States.

      The borderplex region is in the midst of a successful transition to an information-age economy. That transition carries with it a large number of challenges and opportunities that result from economic globalization. The new technologies and more efficient business practices associated with process are helping to revitalize the El Paso/Juárez regional economy.

      International trade has long been a staple of borderplex commerce. NAFTA and the maquila program helped stimulate even greater development in that realm during the late 1990s. El Paso service sector companies are continuing this tradition in the 21st century by identifying new opportunities and creating new products for those markets.

      Of the various challenges posed by this structural shift in the economic fortunes of El Paso, none is more important than the need for improved workforce quality. Greater educational attainment will not only attract new business investment, it will raise labor productivity and metropolitan income performance. Public sector infrastructure investment will complement that process, further improving business productivity and, by extension, private sector profitability.

Labor market

      Expanding national and regional markets have helped stimulate service segment growth in El Paso. Telecommunication call centers have provided some of the most important payroll gains in recent years. The majority of the El Paso operations provide technical support and customer services to incoming calls from national and international client bases. The health care industry is another source for high-paying jobs. El Paso serves as the regional leader in advanced health care provision for far west Texas, southern New Mexico, and northern Mexico. In-bond manufacturing activities in Juárez further create numerous requirements on both sides of the border for such services as advertising, overnight delivery and logistics, reproduction, commercial art, photography, stenographic services, data processing, communications, engineering, accounting, research, and personnel management.

Employment growth

      The importance of service sector business expansion is clearly reflected by the employment base in El Paso. Between 1997 and 2003, double-digit rates of growth were posted by four general jobs categories: finance, insurance, and real estate; transportation, communications, and public utilities; services; and, government. All of those categories, plus retail trade, are projected to continue to add new jobs over the course of the next 10 years. Increasing sophistication in the products offered within each sector is also expected to help improve work force quality as new markets are targeted.

      Transportation, communications, and public utility companies (TCPU) in El Paso have traditionally helped define the city’s character. In the late nineteenth century, El Paso experienced rapid growth as an important hub along the developing railroad system. Throughout the 20th century, El Paso counted Union Pacific, El Paso Natural Gas, and El Paso Electric Company among its major employers. As we begin the 21st century, El Paso still relies on growth in this sector. Transportation and communications remain an essential component in the regional economy due to its proximity to the border, the implementation of NAFTA, and the proliferation of the maquilas. Just as the railroads fueled El Paso’s growth in the nineteenth century, the city’s excellent telecommunications infrastructure is helping El Paso to prosper in the New Economy of the 21st century.

Transportation and warehousing

      Almost 70 percent of employment in the broadly defined TCPU sector is in transportation. NAFTA and the growth of production sharing has been responsible for much of this rise, as the demands of the maquila industry have contributed to a sharp rise in trucking and warehousing activity in recent years. This trend is expected to continue as regional economic activity and trade with Mexico expands. The trucking industry often involves business entrepreneurs who start small and grow to include a fleet of trucks within a few years. Given the large expansion of the in-bond assembly sector across the state of Chihuahua, it is not surprising that the greatest percentage increases in cross-border bridge traffic are in the form of cargo vehicles flowing through Central and East El Paso. That pattern is likely to remain in place for several years to come.