Southern Nevada’s economy – much like everything else in life these days – is tied heavily to the continuing path of the COVID-19 pandemic and its variants. That’s the underlying theme of the end-of-year economic outlook report released today by UNLV’s Center for Business and Economic Research (CBER).
It’s a story of a region on the rise that was hit hard by the pandemic. Then, following signs of a rapid economic surge into 2021, it evolved into what researchers are calling “broken-V” shaped recovery due in part to a persistent pandemic and less-than-stellar COVID-19 vaccination rates.
“Because the Southern Nevada economy heavily depends on tourism, its outlook ties to the future path of the coronavirus,” said Andrew Woods, director of CBER. “The continued progress on vaccinating a higher percentage of the population and the absence of variants that can avoid the protection of vaccines will make economic recovery much more likely.”
CBER officials shared the report and accompanying analysis of the local, state, and national economy Nov. 9 during an Outlook conference at the UNLV Thomas & Mack Center’s Strip View Pavilion. U.S. Secretary of Treasury Janet Yellen delivered the conference keynote address, virtually, on what to expect in the national economy over the coming year.
According to Woods, and CBER research director and economist Stephen Miller, local economic indicators point to a now slowing but continued comeback from a pandemic that the researchers described as an “economic sledgehammer” to Southern Nevada in 2020.
“In 2019, Las Vegas is a city on the edge of a new era,” says Miller. “Then COVID-19 hit.” But, he says, while public health success will ultimately lead to economic success, there are positive signs. After another wave of the pandemic swept the nation last fall and into early 2021, recovery kicked back into gear in March 2021, which Woods says “may have marked the turning of the corner on the pandemic and, thus, the economic recovery.”
Predicting Southern Nevada’s Economy in 2022
Across Southern Nevada’s economy, metrics including visitor volume, gross gaming revenue, hotel occupancy, and employment are expected to follow a similar pattern: huge hits in 2020 followed by a 2021 surge that is expected to increase, albeit slowly, into 2022.
For example, after peaking at 33.5% in April 2020, local unemployment receded to 8% by August 2021, eliminating more than 85% of the initial pandemic spike. Researchers expect unemployment to continue to recess in 2022.
Overall employment recovery, while promising, trails other local economic indicators. After a 26.5% decline in Southern Nevada employment from February to April 2020, local employment has recovered nearly 70% of lost jobs. Growth should continue in 2022, albeit slowly, with 3.7% more jobs expected.
The pandemic didn’t significantly impact construction trends in Clark County, including construction employment. Recent high-profile projects and healthy new home construction activity have kept employment steady in this sector, and multi- and single-family housing permits are expected to grow by about 5% in 2022.
Tourism Index Improves
Because Southern Nevada’s economy is so heavily dependent on tourism, it was hit harder by the pandemic and its future fortune relies on the health of those flying here, lodging here, and playing here.
There too are signs pointing in the right direction. CBER’s Clark County Tourism Index – which combines gross gaming revenue, hotel/motel occupancy, and McCarran Airport activity – has exceeded its pre-COVID peak, recovering 125% of its COVID-19 losses.
- Gross gaming revenue in Clark County surged above pre-COVID numbers, recovering 129% from its floor in April 2020 by July 2021. Numbers have since fallen, but as of September 2021 still remain above pre-COVID levels and are expected to grow by approximately 2% in 2022.
- Visitor volume has recovered nearly 80% from its spring 2020 low, and it’s expected to rebound by another 19% in 2022 if pandemic conditions continue to improve.
Woods says the unprecedented nature of the pandemic and two years of anomalous economic numbers makes forecasting more difficult than in years past.
“Pandemics are rare events, and we hold relatively few data points to inform predictive models,” he says.
Overall, Southern Nevada’s economic recovery outpaced many analysts’ expectations in 2021. Another wave of the pandemic slowed economic growth in Southern Nevada heading into this fall, but most signs point to a cautiously positive picture in 2022.
CBER Outlook Report
CBER’s biannual Outlook report forecasts economic trends for the U.S. and Nevada. Data is compiled from state employment, gaming, and tourism agencies and analyzed to predict local and national economic trends.