January 2007

Maquiladora employment edged down at a 3.6 percent annualized rate in October, the third consecutive monthly decline. Despite the recent weakness, the industry has added more than 31,000 new jobs year-to-date.

Looking at performance by sector, job losses were spread relatively evenly—the only exceptions being chemicals, services and electronics, which saw increases of 2.4, 0.3 and 0.1 percent, respectively (Chart 1). The transportation and textile sectors witnessed the largest declines. Together the two industries were responsible for most of the overall employment decline.

Following strong growth earlier in the year, the maquiladora industry located along the Texas–Mexico border saw employment dip at an annualized rate of 3.6 percent in October. Most of the border cities recorded job declines during the month, except Nuevo Laredo and Ciudad Juarez, which posted gains of 0.4 and 0.2 percent, respectively (Chart 2). Despite the loss, year-to-date the region has added over 12,800 jobs.

The pause in the expansion of the maquiladora industry is related to recent weakness in U.S. industrial production. The outlook for the maquiladora sector remains mostly positive, however, as the U.S. industrial sector regained its upward momentum in November, registering an increase of 0.2 percent.

—Roberto Coronado and Jesus Cañas

Notes Data have been seasonally adjusted by the Dallas Fed. See Data Basics, "Seasonally Adjusting Data," for more information on seasonal adjustment. For a definition of maquiladora, see "Data Definitions." For additional information or questions, please contact Roberto Coronado at 713-483-3275 or Jesus Cañas at 915-521-5233.