BY ALL INDICATIONS, PROGNOSIS NEGATIVE - Business

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Jan. 22, 2009
Copyright © Las Vegas Review-Journal

BY ALL INDICATIONS, PROGNOSIS NEGATIVE

Economist says bad times will persist for LV

By HUBBLE SMITH
LAS VEGAS REVIEW-JOURNAL

Construction continues on M Resort, which is slated to open in March on Las Vegas Boulevard South.
Photo by Gary Thompson.

Local economist Keith Schwer is looking for any hint of improvement in his Southern Nevada Index of Leading Economic Indicators.

For now, he doesn't see any.

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The index fell to 129.56 in December, down from 129.90 the previous month. All 10 series of data declined from a year ago.

"It should, on average, bottom out six months prior to the economy (recovering), giving a signal of an upturn, but we see none," Schwer said Wednesday.

Instead, the continued drop suggests that the first half of this year will be one of economic weakness, he said.

The steepest decline came in commercial building permit valuation, which fell 90.3 percent in October from the same month a year ago to $35.9 million. Residential building permit valuation also showed a dramatic decline of 87.3 percent to $76.6 million.

The index, compiled by the Center for Business and Economic Research, is a six-month forecast from the month of data, based on a net-weighted average of each series after adjustment for seasonal variation. December's index is based on October data.

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.

Schwer, executive director of the research center, said the proposed $775 billion economic stimulus package will help, but it's not going to be a quick fix.

"One critical factor is time, and I would suggest we made some mistakes in the past in dealing with major issues, when Lehman failed and their inability to address that," he said.

"It's going to take time because there are lots of things that are wrong," he added.

Southern Nevada's well-being is dependent on economic conditions elsewhere and what happens in Washington will play an important role in what happens here, he said.

Consumers aren't spending, so any economic stimulus has to come from the government. The tax rebate last year went straight into people's bank accounts to pay down credit cards and did nothing to stimulate the economy, Schwer said.

"Look at where we're going to go. It's very clear we're going to have to run some deficits and we're going to have to prime the pump. What's needed is timely expenditures targeted at areas that are weak in their economies," he said.

Las Vegas needs to get back to what has worked in the past, said Richard Lee, vice president at First American Title Co. New hotels such as Palazzo and Encore have opened recently and M Resort is scheduled to open in March. Those projects create jobs and attract visitors.

CityCenter and Fontainebleau will bring a different product to Las Vegas, he said.

"Meeting space works in Las Vegas," Lee said. "What doesn't work? Fifteen-dollar hamburgers, $200 steaks and $600 bottles of vodka."

Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.

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Please enter your name Name: Please enter your email Email: Please enter a comment COMMENTS : (word count limit is 300) You have reached the maximum number of words allowed Current Word Count: Note: Comments made by reporters and editors of the Las Vegas Review-Journal are presented with a yellow background. Big L wrote on January 27, 2009 02:33 PM: How about bringing back Cheap Shrimp Coctails/Affordable Steaks/$20 tips for better seats at the shows....and a comp breakfast after you've lost $ 1000 on blackjack in 20 minutes....Just a thought I boyd wrote on January 23, 2009 01:12 PM: Las Vegas will not survive with high price of Food and Lodging and majority of visitor going away with feeling they been robbed. We need compete with other cities for the tourist and conventioneer, effective way to do that is offer reasonable rate for everything and not to jackup the prices as much as they have been doing. Las Vegas should make profit by gambling revenue more than any other sources. I am hearing so many complaint from out of towner that Las Vegas has changed for the worse and they no longer can afford to come. Nick wrote on January 22, 2009 03:52 PM: I agree. Las Vegas should go back to what has worked. The proximity to SOCAL gives opportunity to a quick get away for so many. I paid $15 for one drink at a property last weekend. I won't go back there. Stop gauging and fill the place back up. ex gambler wrote on January 22, 2009 03:13 PM: My stimulus check went to a lap dancer at a local strip club and SHE stimulated my lap! rmolnar wrote on January 22, 2009 12:15 PM: Lee: My stimulus check went to the craps table at the El Cortez. I had a $160 win. I'll do the same if we get another one. HELENWEILS wrote on January 22, 2009 11:14 AM: Another problem is that foreign currencies are not the bargain they used to be. This could hurt tourists thinking about coming to Vegas. For example, the Australian dollar was worth nearly the same as the US dollar last year, but is now worth 65 cents, and projected drop to 55 cents. This is great for Americans who like to travel, however, except for the fact that we are going broke. I know it's Barack Obama's fault, because the last 2 days have been awful. Boy, I miss George W. Bush..... Lee wrote on January 22, 2009 08:34 AM: The Tax rebate last year went straight into people's bank accounts to pay down credit cards. I agree with you and argue the point with my daughter about the goverment issuing a shopping card as well as a cash economic stimulus check. 50%cash/50%card but it has to be at least enough to be worth going out to shop. Regardless of what my daughter says, however difficult this would be to do for the goverment, this would get Americans out spending and people could still pay their bills down. Obama should get someone working on this, this could kick start our economy! Hugh Betcha wrote on January 22, 2009 08:21 AM: hmmm, won't be long before the renters start moving into the casino hotel rooms ;) mark wrote on January 22, 2009 07:29 AM: Greg there aren't enough willing to spend the outrageous prices in any currency. The biggest complaint I hear from visitors is the price of food. It's the little fish that really matter. We can't all live off the occasional whale. greg wrote on January 22, 2009 06:22 AM: I beg to differ. The folks with the dough for 15 dollar burgers, 200 dollar steaks and 600 dollar bottles of vodka are still able to spend their euros & yen & dollars here. It's the other 95 percent of us that are the issue. Read All Comments