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Economy showing some improvement in gaming, lagging in creation of jobs
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JERRY HENKEL/LAS VEGAS REVIEW-JOURNAL
Work continues Wednesday on a new Lowes home improvement store at Farm Road and Durango Drive in Las Vegas. Weakness in the construction and convention businesses continues to weigh down the Southern Nevada Index of Leading Economic Indicators. » Buy this photo
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LAS VEGAS REVIEW-JOURNAL
Updated: Feb. 11, 2010 | 1:34 p.m.
Southern Nevada's economy is gaining some traction for recovery, though the most important piece of the puzzle - job growth- is still missing, a UNLV economist said.
The Southern Nevada Index of Leading Economic Indicators showed improvement in gaming revenue and visitor volume from a year ago, but total employment dropped 7.4 percent and the unemployment rate remains much higher than the national average at 13.1 percent.
The index rose to 126.38 in January, up from 125.54 the previous month. It's still down from 127.96 in the same month a year ago.
After falling from its peak in 2007, the index has leveled off over the past several months, suggesting that massive job losses experienced in Southern Nevada are beginning to moderate, said Mary Riddel, economics professor at University of Nevada, Las Vegas, and interim director of the Center for Business and Economic Research.
"That said, it does not suggest a rosy employment picture," Riddel said in an interview Monday. "The thing I try to tell people is we need to get a better idea of what recovery means, and it doesn't mean a return to 2007. It appears we've reached our carrying capacity."
Improved performance in convention business, tourism and construction is necessary before the local economy can add more jobs, she said.
When the economy does recover, it's not going to be "all-out population and job growth," she said. It's going to be at a more moderate pace.
The economic index, compiled by the UNLV research center, is a six-month forecast from the month of data, based on a net-weighted average of each series after adjustment for seasonal variation. January's index is based on November data.
The accompanying 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.
The construction sector, conventions and taxable sales continue to drag the index down.
Residential building permits dropped 38.4 percent in November to 299, while commercial building permits stayed flat at 20. Compared with a year ago, residential permits are up 1 percent, commercial permits down nearly 60 percent.
Convention attendance rose 25.3 percent to 437,864 during the month, but is down 13 percent from a year ago. Taxable sales fell 10.7 percent from a year ago to $2.26 billion in November.
John Restrepo, principal of Restrepo Consulting Group and chairman of the Nevada Economic Forum, said job growth is a key indicator and the job market remains weak.
"We're not going to see a big bump in employment," he said. "Until we see sustainable job growth, and by that I mean six months or more, we cannot say the recession is over here."
Consumers are changing their spending habits, saving more than they have in the past, which is a double-edged sword for Las Vegas in terms of leisure travel spending, Restrepo said.
Taxable retail sales in Southern Nevada dropped to $25.9 billion through November last year, down from about $35 billion in 2008 and $36.4 billion in 2007.
Las Vegas had a good run from 1995 to 2007, but those days are gone, Restrepo said.
"The party's over. Now it's the hangover," he said.
SOUTHERN NEVADA INDEX OF LEADING ECONOMIC INDICATORS
Latest month Year ago % change
Total Employment 833,000 899,700 -7.4
New residents 4,311 4,656 -7.4
Unemployment rate 13.1 8.7 --
New-home sales 477 642 -25.7
Existing-home sales 4,346 2,988 +45.4
New home median price $216,854 $244,090 -11.2
New-home permits 355 168 +111.3
Commercial permits 16 23 -30.4
Gaming revenue $750.8 mil. $702.6 mil. +6.9
Visitor volume 3.16 mil. 3.13 mil. +0.8
McCarran passengers 3/23 mil. 3.23mil. +0.1
Taxable sales $2,26 bil. $2.53 bil. -10.7
SOURCE: Nevada Employment Security Division, Home Builders Research, UNLV Center for Business and Economic Research, Nevada Gaming Control Board, Nevada Department of Taxation, Nevada Department of Motor Vehicles and Public, Safety. Some percentages are rounded.
LAS VEGAS REVIEW-JOURNAL
Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.
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Nevada will not fare well this time around because it failed when times were good to require its casinos to pay for quality education. Instead of creating a solid base for new industry, state and local politicians effectively gave casino operators a huge subsidy in the form of low taxes that would not cover the growth and problems casinos have notoriously created.
Casino operators neither need nor want an educated population, which would only cost them more in wages and threaten their stranglehold on the Nevada economy and political establishment.
In times like these, an educated population will create their way out by moving on to other, sometimes groundbreaking, endeavors and entice new technologies to tap their resources.
You can't diversify an economy by toilet-papering your community with casinos, casino taverns and casino quickie-marts, and failing to make them pay their way.
Dropouts and poker machine zombies will forever be stuck in a one-industry town.
Nevada, especially southern Nevada, will not come out of this well.
"Consumers are changing their spending habits..."
Yes, we are banning all products "Made in China".
If every shopper at Wal Mart bought products Made in USA, their carts would be empty.
Improve job growth AND the economy - BUY AMERICAN MADE PRODUCTS......
Put our faith in the casinos to save us? Don't count on it. They are in it for themselves and that doesn't include customers or employees. They gouge the customers at every turn and pay wages so low, employees can barely keep afloat. I say, let those bankrupt casinos fail and develope Las Vegas into something other than a one horse town.
The tourists can't afford to come here anymore and the locals are buried so far in debt they can't support the local economy, a double edged sword. LV can change/reinvent itself in one way or another, or it can sit back and cross its fingers. The latter appears to be the case. I am buried deep in an underwater mortgage so I feel the pain, but it just amazes me how so many people place all their faith in the casinos to save us all. LV has a long way to go before it reaches bottom, it is going to take radical changes for things to get better.
Its tough to believe this crap when you hear that 100 people that are getting laid off in Clark County Family Services, and the 20+ people in the Comprehensive Planning Department. Things in this City, County, and State are no where close to recovering. In the next 5 months all the homes bought 5 years ago with adjustable rate mortage's are due.....people will be running in the streets. Its long way from even being close to recovering.
VC YOUR COMMENTS ARE RIGHT ON-THE-MONEY
SIRCULES DITTO FOR YOU ALSO
DAVID DITTO FOR YOU
CODER DITTO FOR YOU
GH DITTO FOR YOU
PS: FOLKS IN CONTROL PAINT HAPPY FACES
REALITY IS HERE AND SETTING IN....