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Virus-related economic decreases shown in new report

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Chaves County retail, hotels and restaurants began to experience significant slowdowns by March, as countywide sales taxes remained stable, according to economic data released by the state.

The New Mexico Economic Development Department issued its third-quarter 2020 reports for all 33 counties Thursday. A statewide report also has been released. They are posted on the EDD website, www.gonm.biz.

The reports are intended to help economic developers, business developers and planners develop strategies to assist their communities in economic growth and in recovery from the business shutdowns and restrictions ordered by the state due to the coronavirus situation.

The third-quarter 2020 reports cover January through March 2020. The Chaves County report indicates that, overall, matched gross receipts taxes increased 4%, or about $13.9 million, from the previous year, or compared to third-quarter 2019.

Total matched gross receipts taxes for the 2020 quarter were $326.59 million. Matched gross receipts correlates taxes reported with individual taxpaying entities, so that data can be tracked by categories.

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As many would have expected, due to state public health orders put into place in mid-March that severely restricted “non-essential” businesses such as hospitality, entertainment and non-grocery retail operations, the largest declines in sales taxes were reported by the retail industry ($10.37 million) and the accommodation and food sector ($3.94 million). A broad category known as “other services” also saw a sharp decline of $3.42 million.

Significant dollar increases were reported by the construction sector ($14.48 million) and by a category known as professional, scientific and technical services ($11.18 million).

Initial unemployment claims filed also spiked to about 1,800 during the January to March 2020 period. For the seven quarters prior, they had been stable at about 250 each quarter.

The report indicates that, even though second-quarter and third-quarter 2020 sales taxes are lower than first-quarter 2020 numbers, they are still $3 million higher than the 13-month average prior to July 2019.

Statewide, third-quarter 2020 gross tax receipts increased 12%, or $1.84 billion. The state saw dramatic declines in accommodations and transportation ($192.43 million or 16%), as well as in the arts, entertainment and recreation sector ($26.43 million or 27%). But the retail sector in the state actually grew 17%, or $553.42 million. Total gross receipts taxes reported for the quarter statewide were $17.83 billion.

Initial unemployment claims statewide for the January to March 2020 period totaled about 80,000.

Gross Domestic Product for the state for the second quarter of 2020 (October to December 2019) was $98 billion, a 3% increase compared to second-quarter 2019.