Page 15 - ANALYSIS.XLS

Trade with Mexico, including the impact of the Renegotiated North American Free Trade Agreement
(NAFTA) now known as the new United States-Mexico-Canada Agreement (USMCA), has also played a
major role in increasing economic activity, including employment for the City as well as the State of Texas.
During 2018, Texas exported $109.7B to Mexico, which represented over 35% of Texas’ total exports--
making Mexico its number one trading partner. As USMCA continues to mature, the City of McAllen’s
international toll bridges connecting Hidalgo, Texas with Reynosa, Tamaulipas as well as Anzalduas
connecting Mission, Texas to Reynosa, Tamaulipas will continue to facilitate trade between Mexico and
the United States.

The City’s unemployment rate has steadily declined since 2011, decreasing gradually to 5.10% in 2015.
In 2016 the rate went up prior to going back down in 2017 to 4.7%. This past year, the City’s rate has
increased to 10.2%, an increase of nearly 2.5 times the September 2019 unemployment rate of 4%.

McAllen MSA Unemployment Rate
Ten Year History
14%

12%
10.2%

10% 8.2% 7.8%

8% 6.9% 6.3%
5.1% 5.2%

6% 4.7% 4.5% 4.0%

4%

2%

0%
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Fiscal Year Ending

Source: Texas Workforce Commission

Another useful source of information for assessing the City’s economy is the McAllen Area Economic
Pulse report, published by the McAllen Chamber of Commerce. A copy has been included in the
Supplemental Section of this budget, pages 309-311. This year’s report indicates the effects of Covid-19
through the end of the third quarter. According to the latest report available, September 2020, the
economic index for the McAllen Area decreased from 195.5 in 2019 to 184.7 in September 2020. This
index reflects for the McAllen area economy a decrease in retail sales of -4.07% and airline boarding’s
decrease of -56.0%, and a decrease in lodging tax receipts of -33.8% while an increase in motor vehicle
purchases of 1.2%, and new home purchases was up by nearly 11.9%.

2020-2021 Budget Message iii