Economic outlook bright for McAllen area

An Edinburg call center that opened late last year with plans to employ 400 could be at hiring capacity by this spring, months ahead of its original schedule.

MAXIMUS, a company contracted with Texas to enroll families in state assistance programs, projected to reach 400 employees at its Edinburg office later the year. But Leslie Wolfe, the company’s president of health services in Texas, said MAXIMUS has surpassed all its hiring goals after choosing the Rio Grande Valley for its bilingual and readily available workforce.

“We knew the unemployment rate was still over 10 (percent),” Wolfe said about the company’s interest in locating its fourth Texas call center in the McAllen metro area. “We were hoping that it meant people would want to work.”

While the unemployment rate in Hidalgo and Cameron counties remains the highest in the state, the region has attempted to buck that trend by steadily adding jobs to its workforce.

The McAllen metro area set an all-time high when about 285,000 people were employed in November, the latest figures available from the Texas Workforce Commission. By adding 6,000 jobs compared to October, the McAllen metro area’s unemployment rate dropped to 11 percent, which was still more than 3 percentage points higher than the state average.

But McAllen’s job growth landed it atop The Fiscal Times’ November ranking of the nation’s fastest-growing metro areas, with 4 percent added to its total jobs.

And that trend doesn’t appear to be slowing down.

Woods & Poole Economics, a Washington, D.C., firm that specializes in long-term economic projections, released estimates this month that say McAllen will add some 80,000 jobs over the next decade. Woods & Poole’s projections of a 2.3 percent growth rate for McAllen made it the list’s fifth-fastest-growing city through 2022.

McAllen was in a strong position once the firm forecast much of the nation’s job growth to come in health care, education and retail, three employment sectors where Hidalgo County excels.

Job growth in those areas are “reasons to be cautiously optimistic in 2012” despite the Valley’s high unemployment rate, said Victor de Leon, a spokesman for Workforce Solutions, the Lower Rio Grande Valley’s workforce development board. With hiring on an upward trend since the 2008 recession started tapering off, McAllen has seen a faster recovery than most other metro areas, even if it’s not evident in its unemployment rate.

Part of that is due to a rapidly growing population that continually adds new people to the workforce. McAllen’s unemployment rate in October, for example, was one-tenth of a percentage point higher than the previous year despite having some 6,000 more jobs.

De Leon said customer care centers – like MAXIMUS’s Edinburg call center – were a strong part of the economy in 2011, employing about 8,500 people in the Valley last year with another 1,000 hires projected for 2012. Health care also remains a vibrant and growing part of the area’s economy, though there is uncertainty on how government cuts to the Medicaid and Medicare programs will affect the medical field locally.

Renewable energy, with jobs generated as a result of the new wind farms in Cameron and Willacy counties, is also a bright spot.

Keith Patridge, the president and CEO of the McAllen Economic Development Corp., said local job growth is likely to be driven by existing companies looking to jump-start projects delayed by the recession. If the U.S. economy continues to rebound, Valley manufacturers that supply the maquila industry should see growth once production picks up in the Mexican factories.

The violence that plagues Mexico’s northern border and the impending presidential elections in both countries could conspire to create economic uncertainty, Patridge said. But the Valley’s geographic location, which provides companies the ability to benefit from cheap labor in Mexico and U.S. assets, should continue to be a positive.

Although uncertainty reigns for portions of the economy that are tied to Mexico, the Valley will continue to receive a boost from strong economic fundamentals such as a young workforce and its low cost of living, said Steve Ahlenius, the president of the McAllen Chamber of Commerce. Texas escaped largely unscathed from the recession that ravaged other parts of the country, positioning McAllen and the rest of Texas for a faster rebound.

“It’s folks in other parts of the country who are worried having seen their home values depreciated, their 401(k) decimated and jobs go away,” Ahlenius said. “That’s not happening here so I see some really positive things” for McAllen in 2012.

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Jared Janes covers Hidalgo County government, Edinburg and legislative issues for The Monitor. He can be reached at jjanes@themonitor.com and (956) 683-4424.

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