Key indicators for Southern Nevada's tourism industry declined in May, dragging a local economic index to its lowest level since 2003.
Housing numbers continued to post double-digit decreases, including a 44.7 percent drop in new-home sales and a 17.6 percent decline in new-home median price.
With eight of 10 data series showing negative percentages from a year ago, the Southern Nevada Index of Leading Economic Indicators fell to 130.25 in July, compared with 133.24 in July 2007.
Visitor volume and convention attendance recorded modest growth of less than 1 percent in May. Gaming revenue dropped a sharp 16.4 percent and passenger count at McCarran International Airport was off 4.7 percent.
Clark County ended a five-month slide in gaming revenue with a 2.1 percent gain in June. Casinos brought in $801.6 million, compared with $789.6 million in June 2007. Still, the Clark County tourism index is down 9 percent from a year ago at 155.80.
The economic index corroborates Southern Nevada's current recession and foretells a weak second half of the year, said Keith Schwer, executive director of the Center for Business and Economic Research.
Schwer cited extensive media coverage of excess housing inventories, credit problems in various financial sectors and energy prices that cut into the budget of anyone who drives. Any of these problems could be enough to create a recession, he said.
Most people believe that national and local conditions will be "somewhat worse" during the third quarter and that difficulties are far from over, Schwer said.
"Consumer spending is down and they're cutting back on automobiles, furniture, home repairs and travel to Las Vegas," he said.
The economic index, compiled by the research center at the University of Nevada, Las Vegas, is a six-month forecast from the month of the data, based on a net-weighted average of each series after adjustments for seasonal variation.
The accompanying Review-Journal chart includes several of the index's categories, along with data such as new residents, and employment and housing numbers, updated for the most recent month for which figures are available.
Nevada lost 12,100 jobs over the last 12 months, compared with average annual gains of 40,000 jobs during the 1990s, said Jeff Thredgold, economic consultant for Nevada State Bank.
Weaker job growth has resulted in less income creation and softer retail sales, which has a negative effect on small businesses.
However, a higher unemployment rate and slower job growth contribute positively to the Nevada State Bank Small Business Index, which rose to 70.9 in July from 70.3 in June. It suggests greater access to labor for small businesses, Thredgold said.
Nevada's economy gained an estimated 12,300 jobs last year, 56,600 jobs in 2006 and 70,300 jobs in 2005, the strongest year for job gains on record.
Las Vegas is ranked No. 3 behind New York and Orlando, Fla., in Global Insight's 2007 top 20 U.S. tourism destinations. Approximately 125 visitors are needed to create a job in Las Vegas and the city is second to Orlando in the Tourism Job Dependence Index, which measures tourism jobs as a percent of total employment.
Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.
RSS