EL PASO, Texas (KFOX14\/CBS4) \u2014 The economic outlook for the Borderland in 2026 presents a mixed picture, according to one El Paso expert.<\/p>\n
Tom Fullerton, professor of economics at the University of Texas at El Paso, highlighted on Friday that, while the region’s economy is expected to expand, several challenges could hinder growth.<\/p>\n
“2026 has a lot of uncertainty associated with it,” Fullerton said, noting that his predictions are based on economic outlooks for the U.S. and Mexico and their impact on the border region’s economy.<\/p>\n
Fullerton explained that tariffs imposed by the Trump administration on both consumer goods and raw materials are likely to reduce profit margins, contributing to a rise in business bankruptcies, particularly in logistics, manufacturing, and retail sectors.<\/p>\n
Fullerton also pointed out that high consumer debt and interest rates are increasing loan delinquencies, which may lead to defaults.<\/p>\n
So, what does that mean?<\/p>\n
RECOMMENDED: El Paso businesses gain inventory tax break, local governments weigh revenue concerns<\/a><\/p>\n “One, consumers are going to be borrowing less than they otherwise would under different circumstances,” Fullerton said. “And two… we’re likely to observe increased levels of business bankruptcies and personal bankruptcies in 2026.”<\/p>\n This situation is expected to slow down overall business activity and employment growth.<\/p>\n Despite these challenges, some service sectors, including healthcare, are projected to add jobs in 2026.<\/p>\n The development of data centers in the area, such as Project Jupiter in Santa Teresa and the Meta center in El Paso, is anticipated to impact non-residential construction initially, with broader employment benefits expected to follow.<\/p>\n Fullerton noted that while the rate of business formation might slow, the total number of registered businesses is expected to increase, with gross retail activity surpassing $20 billion for the first time in El Paso’s economic history.<\/p>\n Despite a potential rise in the unemployment rate by 20 to 30 basis points, Fullerton remains optimistic about the region’s economic trajectory.<\/p>\n “The El Paso economy is still going to be expanding,” Fullerton said, with per capita personal income projected to rise to about $53,200, marking progress even though it remains below national and state averages.<\/p>\n