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UNLV official: No recovery until 2011 for Southern Nevada
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LAS VEGAS REVIEW-JOURNAL
Any signs of economic recovery in Southern Nevada won’t come until 2011, and that’s assuming the recession doesn’t take a double dip as some economists have warned, the director of UNLV’s business research center said Tuesday.
The local economy lags the national recovery as record-high unemployment and tight discretionary spending have dogged the tourism industry, Mary Riddel said at a midyear economic outlook presented by the Center for Business and Economic Research.
Las Vegas has lost about 140,000 jobs in the past three years, including 80,000 high-paying construction jobs and 20,000 leisure and hospitality jobs. That has created a fiscal crunch for Nevada’s state budget and 14 percent unemployment, among the highest in the nation.
Riddel’s forecast calls for a mixed picture for the remainder of this year and a slow turnaround in 2011, with modest 2 percent growth in visitor volume and 1.2 percent growth in gross gaming revenue.
She also projects a 1.5 percent increase in housing permits, 1.1 percent increase in personal income and minimal growth in employment, population and hotel rooms.
Southern Nevada’s economy is starting to show positive signs, though it’s probably going to take at least six months before the region sees a boost in economic activity, Riddel told a crowd of about 200 people at the Palazzo.
She said the biggest risk to her forecast is a double-dip recession as the government’s $787 billion stimulus package fades out.
“If we get a double-dip recession, all bets are off. A double dip would be devastating for Nevada,” she said. “I think a lot of the consumption and spending we’ve seen comes from this stimulus. The economy is in trouble. Let’s build a scaffold around it called government spending. My concern is when you pull this scaffold away, you might not see that recovering economy.”
Other forecast risks include airlines cutting routes and raising fares; a sharp drop in international visitors, especially if the euro depreciates further against the dollar; and inflation and energy price hikes.
The University of Nevada, Las Vegas economics professor was generally pessimistic in her assessment of Southern Nevada’s key indicators.
Unemployment is closer to 22 percent counting the “underemployed,” or part-time workers who would rather be working full time, she said. Job losses have spread into broader segments of hotel and gaming, retail and services as both tourists and residents spend less.
There’s excess supply in both commercial and residential real estate. Construction permit activity is 15 percent of its peak in 2007.
Waiting lines for a taxi at McCarran International Airport are shorter. Plenty of seating is available at casino table games. Average hotel room rates have dropped below $100 a night.
“In the next six months, don’t expect things to be any different than they are now,” Riddel said. “We may see modest improvement, but we’re not going to come out of this like gangbusters.”
Population growth should exceed the national average of 1 percent a year but will not return to levels that saw Nevada leading the nation in growth during the boom years, said Constant Tra, associate director of the UNLV research center.
Estimated by Clark County Comprehensive Planning Department at slightly more than 2 million in 2009, population will grow to 2.5 million by 2025 and to nearly 4 million by 2050, Tra projected.
Visitor volume and gaming revenue may show real signs of life in the first quarter, paving the way for some job creation, Riddel said.
One of her most serious concerns is the massive national deficit, she said. Taxpayers funded the American Recovery and Reinvestment Act, the “Cash for Clunkers” program and the homebuyer tax credit, which many analysts fear could lead to rampant inflation in coming quarters.
Also, small businesses can’t get a loan. They account for about 75 percent of the U.S. work force but won’t be hiring if they can’t get financing, Riddel said.
“The idea behind TARP (Toxic Assets Relief Program) was to build up reserves for the banks,” she said. “Here’s the problem: We gave them the money, but they haven’t been lending it out. This could be the core reason why we’re not pulling out of the recession.”
Looking for something positive, Riddel pointed to the health care industry as a possible avenue for economic diversification in Southern Nevada, as well as planned construction of a wind-turbine plant that is expected to provide 1,000 new jobs.
An economic report from the Brookings Institution showed that the Intermountain West states made little progress toward recovery in the first quarter as steep employment declines weighed heavily on the region.
While gross metropolitan product growth slowed in the first quarter, it remained positive and grew at a faster rate than the national average in every city except Las Vegas and Albuquerque, N.M.
Las Vegas “remains uniquely damaged and suffered another quarter of minimal output growth and job loss,” the report said. Gross metropolitan product in Las Vegas grew at a feeble 0.3 percent during the quarter, up from 0.2 percent in the previous quarter.
The region’s overhang of real estate-owned, or foreclosed, properties increased in every city except Las Vegas, though inventories remain elevated, Brookings reported.
Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.
| Indicator | 2010 | % change | 2011 | %change |
| Employment | 785,009 | -5.0 | 788,934 | 0.5 |
| Housing permits | 5,731 | -0.1 | 5,817 | 1.5 |
| Gaming revenue | $8.93 billion | 1.0 | $9.03 billion | 1.2 |
| Personal income | $71.82 billion | -1.5 | $72.61 billion | 1.1 |
| Population | 1.957 million | 0.2 | 1.965 million | 0.4 |
| Visitor volume | 37.26 million | 2.5 | 38.01 million | 2.0 |
| Hotel rooms | 152,928 | 2.7 | 153,035 | 0.1 |
SOURCE: Center for Business and Economic Research
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Change comes from the people, any idiot that relies on the government or the wanna be "kings" of the castle to fix the economy is stupid.
Riddel has to paint a rosey picture, according to transparentnevada she has taxpayer funded position which she gets $129,915 in money and benefits from the taxpayers............to do what ???? tell us taxpayers how everything is fine........lmao
I'm with Dahn, those population estimates are insane. How can they justify those numbers? Is there something going on to revive LV that we don't know about ? Nevada supposedly has the 5th best climate for business yet no corporations will touch it with a 10 foot pole. Housing is at its most affordable level in decades yet inventories remain at historic levels. So what gives?
Anyone who thinks we are going to get out of this sludgepool before 2015 is smoking crack. The Las Vegas economy is permanently impaired. Gaming revenues are declining here, rising in McCau. Taxes are being raised here by our moronic elected officials. Commercial real estate vacacies (if the reality were known) are probably pushing 40%. There is a net "outflow" of residents. Banks aren't lending, and of those still around 80% are likely to get closed in the next 12 months, along with several of the credit unions. Steve Wynn is moving his headquarters to China... he's no dummy. He knows it's OVER for Las Vegas, time to move on.
Municipal Planning Departments are simply more political hacks trying to hang onto their "jobs" during our depression.
Look, the Strip casinos were only down 1% in April. The Boulder Strip casinos were down 25%. This indicates that the big-time Whales from wherever are doing quite well, thank you, and that the average bed making, car parking average Joe living in his/her mobile home around Boulder Highway is hurting. With Caesar's talking about splitting dealers tips, things don't seem quite as rosy as the city planners pretend. But hey, they have a job to protect, too.
I LOVE THESE STORIES / LEAD IN IS HAPPY TALK / THIS WILL HELP HARRY / BUT AS YOU 'REID' MARY IS PESSIMISTIC............................
1% MODEST IMPROVEMENT / 1% IS SOOOOO UNDER MODEST WORDS FAIL ME.................4 MILLION FOLKS BY 2050 / GUESS FOLKS WILL START DRINKING SAND OR YOUR HOUSEHOLD WATER BILL WILL BE AROUND $275.00 A MONTH...............
So Clark County Comprehensive Planning is still projecting growth in the Valley, up to at least 4 million people? Is there anyone else here who thinks this plan is not only environmentally unsustainable but also just plain insane?
According to that internet real estate estimator out of Seattle, my home and all of my neighbors homes, took a $60,000 hit over just the last 30 days. I checked family member homes in Reno and California, and most of those homes appreciated one to six thousand dollars. Why this financial dip in Las Vegas?