The Southern Nevada economy will continue to improve in 2015 and 2016 with each year being stronger than the last, according to the economic outlook report released today by the UNLV Center for Business and Economic Research (CBER) at its biannual conference.
The economy is becoming more robust with Southern Nevada industries growing, more people joining the workforce and more tourists visiting the area, UNLV economists report.
Employment growth was widespread across the state's industries in 2013 and so far in 2014. Hospitality, construction and real estate, manufacturing, transportation, financial activities, education, health, and professional and business services all are performing well.
The result is falling unemployment rates. The seasonally adjusted Nevada unemployment rate is 7.3 percent, which is 2.3 percent below last year's September unemployment rate.
"With job gains in these industries, we can expect Las Vegas to reach its pre-recession levels of employment in early 2016," said Stephen Brown, director of CBER. "We are likely to see an unemployment rate around 6 percent by the end of 2016."
In 2013, the Las Vegas metropolitan area saw an increase in employment of 24,500 jobs or 2.9 percent over the previous year. In the first nine months of 2014, the area saw another increase in employment of 17,100 jobs, a 2.7 percent annual increase.
Of all the major areas in the state, only Las Vegas mirrored the overall state pattern. Nevada is fifth in the nation in employment growth with a 2.78 percent increase in 2014. In the first nine months of 2014, the state saw job gains of 24,800.
Activity in the tourism sector shows an upward trend in 2014 so far. For the first nine months of 2014, Clark County visitor volume averaged 4.2 percent higher than for the same time period in 2013. With continued growth, Clark County's 2014 visitor volume could exceed the previous high mark of 43.9 million set in 2007.
The same is true for visitor volume in Las Vegas. For the first nine months of 2014, the city saw a 3.8 percent increase in visitor volume than the same time period in 2013.
Economists also noted gains in the residential real estate industry. Las Vegas house prices have risen by 49.7 percent since the industry hit rock bottom in January 2012. U.S. housing prices have risen by 23.6 percent during that same time period.
Despite the gains, Nevada remains the state with the highest percentage of homeowners with negative equity in their homes followed by Florida, Arizona, Illinois and Rhode Island.
Las Vegas housing is still affordable compared to the rest of the U.S., which should contribute to positive economic growth, Brown said.
"Although we tend to think of low housing prices as indicative of a depressed market, low housing prices will help the Nevada economy grow," he said.
Economists also found:
- Clark County taxable sales continue to be strong, 9.6 percent higher in the first eight months of 2014 than in the same period of 2013. Increased visitor spending and rising personal income in Las Vegas are two factors contributing to the strong gains in taxable sales.
- Despite rising home prices, construction activity remains low in Clark County. Although housing permits have increased by 86.3 percent since 2011, residential construction is still far below its pre-recession peak.
- Despite recent gains, Las Vegas gaming is lagging well behind its national counterpart. U.S. gambling is above its pre-recession peak, but Las Vegas Strip gross gaming revenue is still 4.7 percent below its pre-recession peak.
- Visitor spending on non-gaming activities in Las Vegas is more than three times that of gaming revenue.
The Economic Outlook conference forecasts economic trends for the U.S. and Nevada. CBER compiles and analyzes data from state employment and gaming and tourism agencies to forecast economic trends.