Because it doesn’t have a booming tech industry like Colorado, Utah, and Idaho.
I do think NM could be a prime candidate though for such an industry and honestly really should incentivize R&D companies to move into the area, especially given the presence of Los Alamos already so it isn’t a stretch of imagination.
NM is a case where reduced regulation and more pro-business policies actually really could be helpful imo.
Nevada, Arizona, Texas, and Montana don't have big tech industries either (excluding Austin), but they're all growing quickly despite that.
You are correct that regulations and economic policy play a large role in New Mexico's growth problem. New Mexico has higher tax rates and a bigger state government than surrounding states: its most recent budget spent $4500 per person, versus just $2200 per person in Arizona (obviously, not the full story: this # doesn't account for regulatory environments, specific tax rates, etc, but a good indicator).
Explanations that rely on NM not having any "hot" cities not seem very fitting. First, focusing on "hot cities" ignores why those cities are hot in the first place: cities do not become hot randomly, but usually as a function of other decisions or policies. Salt Lake City is "hot" because it is a good place to do business: Albuquerque is not because it is not.
Focusing on temperature also seems misguided. None of Boise, Salt Lake City, Denver, or the Rocky states more generally are particularly known for their warmth, yet Idaho grew by 17% and Montana by 10% between 2010 and 2020.
