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Southern Nevada economy seen in first recovery stage
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LAS VEGAS REVIEW-JOURNAL
Updated: Dec. 14, 2011 | 10:52 a.m.
Southern Nevada's economy is in the initial stages of recovery and will be much better next year, UNLV economist Stephen Brown said Tuesday at Economic Outlook 2012.
Recovery that began this year will continue, but probably at a slower pace than the overall U.S. economy, the director of the Center for Business and Economic Research told about 300 business leaders meeting at M Resort.
He's forecasting growth in every economic indicator series in 2012, led by a 5.1 percent increase in visitor volume and 4 percent increase in gaming revenue and housing permits. Employment and population growth will remain under 1 percent, as it was in 2011.
"We consolidated our losses and started growing in 2011, and in 2012 and 2013, we'll see the fruits of that growth," Brown said. "What we're seeing is not only the end of declines, but we're beginning to see growth here in Southern Nevada."
Tourism is definitely showing an upward trend. After suffering some down years, visitor volume has rebounded to 2007 levels and hotel occupancy has climbed above 85 percent, though average room rates have fallen 25 percent to 30 percent since 2007, Brown noted.
Today's visitor profile differs from 2007's visitor . They're coming from farther away and they're staying longer, but they're gambling less.
"They spend less on gaming, more on other things. We're seeing a shift of Las Vegas becoming more of an event destination," Brown said.
Recovery will remain slow in sectors such as real estate and construction, with construction moving sideways, or going up and down from month to month. That's a good indication it's at the bottom of the cycle, the economist said.
The Case-Shiller Home Price Index and data from Las Vegas-based Home Builders Research show home prices continuing to drop. That's troubling, Brown said. However, the erosion of housing prices -- which is happening nationwide -- will end next year and that will boost consumer confidence.
"We're seeing houses sell for below replacement cost. That's something that's not sustainable," he said.
What will help Southern Nevada's recovery is a stronger U.S. economy, Brown said. The Western Blue Chip Economic Forecast shows employment and income growth in all Western states for 2012, led by Utah's 3 percent employment growth and better than 5 percent income growth.
CBER's Business Confidence Index topped 100 for the first time in 2011, though "financial headwinds" preventing many smaller firms from getting credit and holding back economic expansion in Southern Nevada, Brown said.
Asked about a "jobless recovery" during a question-and-answer period, Brown responded that the nation and Southern Nevada are "not technically" in a jobless recovery because jobs are being created in sectors of the economy that are expanding.
"We're not seeing it in construction, but we are seeing it in business services and gaming," he said.
Europe's financial turmoil won't directly affect U.S. markets and financial institutions in a negative way, Brown said. It could actually benefit the U.S. if people move money from there to safer U.S. investments, he said.
No recession is imminent at the national level, Brown said early in his presentation. Slowing GDP and a drop in the stock market indicate a recession may be imminent, but those indicators are often unreliable.
"I would disregard them. Economists like to say the stock market has forecast 10 out of the last three recessions. It's very volatile," Brown said. "Oil prices, the yield curve and the U.S. economic index are saying no recession. I think we're on the cusp of strong gains in U.S. economic activity."
Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.
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I am looking for a friend of mine named Stephen Barkett. Anyone familiar with him? Send me a pic. Please. Thanks.
Brown had better stick around the University that way he can hide behind the doors of academia. There is no recovery under way I wish there were, head winds are growing in europe and asia, unsustainable debt levels at state and federal levels while politicians like REID the BAFFOON continue to spew and blither garbage.
I would tend to disagree with any sort of economic recovery in Las Vegas. MGM posted a 3rd quarterly loss. The Las Vegas Hilton posted a quarterly loss. Caesar's Entertainment posted a quarterly loss. The Stratosphere posted a quarterly loss. Las Vegas remains the foreclosure capitol of the United States. Unemployment remains very high in Las Vegas. People are moving out of Las Vegas in the throngs because they cannot find employment in Las Vegas. Student enrollment has dropped, and continues to drop at the Clark County School District. No, I do not see any economic recovery in Las Vegas. Instead, what I see is a dying city with an increasing number of businesses going out of business in Las Vegas and more empty store fronts.
My brother still doesn't have a job after 2 years. Recession is still not over.
roger. the revelation that the real estate sales numbers were off by a factor of 100% is telling, not that they did it maliciously...its that the housing market is far worse than even the bad people had already accepted. no wonder banks don't want to get back in.
Ya sure sure .the recesion ended in 2009 also right i dont know there smokin but can i have a hit from it too ....i dont see anything on the horizon ..
Its amazing that there are any positive economic indicators with Secretary of State Ross Miller doing everything in his power legal and otherwise to keep business out of the state and disuede new businesses from starting within the state. Miller is like Kryptonite to non-gaming and non-mining businesses.
Are they smoking hash at UNLV? Las Vegas is the worst economy in the nation still. Why is he lying to an audience of 300 business people today? Does nobody watch CNN? Europe is about to crash again and will fall into a second deep recession and drag America and the rest of the world down again. Las Vegas still has the highest unemployment rate, highest foreclosure rate, and worst school system in the nation. Homes have lost more than 60% of their value, and at least 81% are underwater.
Its sad that anyone's happiness depends on the recovery of the Las Vegas economy or the value of your house. You haters will still be haters when there is no more reason left to hate...its what you do.
@gbigs...was there a news article on the real estate board fudging the numbers?
"Brown responded that the nation and Southern Nevada are "not technically" in a jobless recovery because there are jobs being created in sectors of the economy that are expanding.".....well i know i feel better now, how about you? one could argue we are "not technically" in a recession either but it sure feels like one.... wonder if we were "not technically" in a real estate bubble either....