An assessment of national and regional economic trends indicates Southern Nevada's economy is slowly progressing and will pick up during the latter half of 2011, UNLV economists at the Center for Business & Economic Research (CBER) reported Wednesday. It will be up to Nevada's tourism and gaming industries - the state's most dominant sectors - to take the lead in helping Southern Nevada's economy rebound, UNLV economists said. Crucial to the industries' success is how well the national economy performs.
"The Southern Nevada economy is much more dependent on the national economy taking off, more so now than it has been at any time in its recent past. What happens on the national level is really important to Southern Nevada's economic rebound," said Stephen Brown, an economics professor and CBER director. "We aren't going to see diversification in other industries happen rapidly so the only thing that can bring us back right now is tourism and gaming."
The hard truth, Brown said, is that Southern Nevada's economy remains at the bottom as the state's unemployment rate hovers at 14 percent while Clark County's population remains flat at under two million. About 70 percent of homeowners with mortgages owe more on their homes than current market prices. However, the CBER report finds there are slight increases in gaming revenue and the convention industry has helped spur an increase in visitors. Low hotel rates have also helped occupancy rates rise.
Among the economists' findings:
- The latter half of 2011 is expected to see modest gains in the tourism and gaming and will continue into 2012.
- Employment growth is not expected during the first four to six months of 2011.
- Visitor volume and gaming revenue will both rise, but gaming revenue will rise at a slower rate because visitors are budget conscious.
- Conventions are bringing in the most visitors as discretionary spending remains low and visitors as much of the local tourism industry relies upon California, also experiencing slow economic growth.
- Population growth will be moderate.
- Pending the nation's recovery, the Southern Nevada economy will get a boost. If the U.S. economic recovery stalls, the outlook for Southern Nevada will be delayed.
The real estate industry will not sustain the Southern Nevada economy as it has in years past, the CBER report states. There is a substantial excess of residential and commercial property with little demand. Low home prices could work to Southern Nevada's advantage, Brown said. Increased affordable housing can attract retirees as well as new and established industries hoping to attract employees.
The CBER conference, held twice a year, forecasts economic trends for the U.S. and Southern Nevada. Data is compiled from state employment, gaming and tourism agencies to analyze local and national economic trends.
For more information, visit CBER at the UNLV College of Business.