The Southern Nevada economy is in its fourth year of an escalating recovery with no signs of slowing down, according to the midyear economic outlook report released today by the UNLV Center for Business and Economic Research (CBER).
UNLV economists report a positive economic outlook for the remainder of 2014 and through 2015, with gaining momentum expected each year. Las Vegas should reach its prerecession levels of employment in early 2016, economists said.
"The good news is that the Southern Nevada economy is improving--- and at an accelerating rate," Brown said. "But the great news is that the growth is widespread across Southern Nevada's industries."
Leisure and hospitality, construction, real estate, manufacturing, transportation and utilities, financial activities, professional and business services, education and health services all are doing well, Brown added.
Financial conditions statewide also are improving, and visitor volume is once again rising after a year of stagnation.
Nevada's employment has been growing. In 2010, the state lost 7,300 jobs. In 2011, 2012 and 2013, Nevada saw job gains of 12,000, 22,400 and 39, 500 respectively. In the first four months of 2014, the state saw job gains of 19,800, or 5.1 percent.
In 2013, the Las Vegas metropolitan area saw an increase in employment of 24,000 jobs or 2.9 percent over the previous year. In the first four months of 2014, the Las Vegas metropolitan area saw another increase in employment of 11,000 jobs.
In early 2014, all Nevada industries except trade, transportation and utilities saw employment gains. Construction, financial activities, professional and business services and other services were particularly strong.
Housing prices also are on the rise, signaling another sign of long-term recovery. Las Vegas housing prices have risen by 44.8 percent since they hit bottom in January 2012. A lack of available supply is pushing up prices for single-family homes in Las Vegas.
However, Nevada still remains the state with the highest percentage of homeowners with negative equity. Other states rounding out the top eight include: Florida, Mississippi, Arizona, Ohio, Illinois, Georgia and Michigan. As of first quarter 2014, 29.4 percent of the homeowners in Nevada had negative equity. This is an improvement from first quarter of 2013, when 45.2 percent of the homeowners had negative equity.
Las Vegas housing remains very affordable when compared to the rest of the United States, which should contribute to stronger population growth in the coming years.
"Although we tend to think of low housing prices as indicative of a depressed market, low housing prices will help the Nevada economy grow," Brown said. "That is one of the primary reasons that many long-term forecasts show strong population gains for the region."
Economists also found:
- Taxable sales continue to strengthen. Clark County taxable sales were 9 percent higher in the first quarter 2014 than in the same period in 2013. Increased visitor spending and rising personal income in Las Vegas are two factors that contributed to the strong gains in taxable sales.
- Activity in the tourism sector continues to improve. In 2013, Clark County visitor volume was .4 percent lower than in 2012, marking the first decline in Clark County since 2008. For the first three months of 2014, Clark County visitor volume averaged 5.4 percent higher than the same period in 2013. With continued growth, Clark County visitor volume for 2014 could exceed the previous high water mark of nearly 44 million in 2007.
- Gaming revenues, however, are not back to prerecession levels. As of March 2014, Nevada, Clark County, and the Las Vegas Strip gaming revenues were 14.9 percent, 13.3 percent and 7.8 percent below their respective peaks.
- Visitor spending on non-gaming activities in Las Vegas is more than three times that of gaming revenue. Las Vegas visitor non-gaming spending has increased by 28.2 percent since 2009. However, it is 2.5 percent below its prerecession peak.
- Through 2013 and the first four months of 2014, office employment increased 4.5 percent in areas such as as financial activities, professional and business services and education and health services. This is 4.2 percent higher than its prerecession high. With increased employment in Las Vegas office jobs, office space vacancy rates continue to fall.
The CBER conference, held twice a year, forecasts economic trends for the U.S. and Nevada. Data is compiled from state employment and gaming and tourism agencies to analyze local and national economic trends.
For more information, visit CBER at the Lee Business School.
