February 2007

The maquiladora sector remained on a downward trend in November, with employment falling at a 5.8 percent annualized rate, the fourth consecutive monthly decline. Despite the recent weakness, the industry added more than 24,600 net jobs year-to-date.

Looking at performance by sector, job losses were broadly based—the only exceptions being the services and furniture industries, which saw increases of 1 and 0.5 percent, respectively (Chart 1). The electronics, machinery and textile sectors witnessed the largest losses; together the three industries were responsible for 96 percent of the overall employment decline.

Chart 1

The maquiladora industry located along the Texas–Mexico border saw employment dip at an annualized rate of 6.7 percent in November, the fourth consecutive monthly decline. All the border cities along the Texas–Mexico border recorded job losses during the month, with Juárez and Piedras Negras registering the largest rates of decline—0.7 and 0.6 percent, respectively (Chart 2). Despite the recent softness, year-to-date the region added over 9,800 jobs, thanks to strong job growth through July.

Chart 2

The pause in the expansion of the maquiladora industry is related to recent weakness in U.S. industrial production during the months of September through November. The outlook for the maquiladora sector remains mostly positive. U.S. industrial production regained its upward momentum in December, registering an increase of 0.4 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.