On January 19, the UNLV Lee Business School’s Center for Business & Economic Research released the 2017 first quarter survey that indexes business confidence in Southern Nevada. The report is published by Stephen M. Miller, Director, and Jinju Lee, Economic Analyst for the Center.
Highlights of the report show a surge in confidence that is thought to reflect a “New Year’s Effect” and hope for the new administration as well as, the expectations regarding new fiscal stimulus and deregulation policies. The latter part was a new question in the survey posed after the election.
The Southern Nevada Business Confidence Index is a guide used to judge whether or not business owners feel that our economy is headed in the right direction. According to a poll conducted by UNLV’s Center for Business and Economic Research, the Index numbers surged by 14.3 percent from 118.6 in the fourth quarter of 2016 to 135.5 in the first quarter of 2017. The index includes five components: business expectations of (i) general economic conditions in Nevada at 151.3, (ii) sales 141.0, (iii) profits 135.9, (iv) hiring 118.4, and (v) capital expenditures at 130.8. Numbers above 100 implies that respondents, on average, feel more positive than negative about the five components.
Both sales and profits are expected to continue to climb during the rest of 2017, at what rate is anyone’s guess.
Interesting to note that all components except for hiring jumped remarkably from last quarter and hiring, the only component that experienced a loss from a year ago, reflects a recent three-month rolling average of 1,600 job losses.
However, despite the low hiring figure, it remains above 100, and even though the number does not indicate that local companies will be expanding their workforce, there is hope on the horizon for the jobs market. Southern Nevada is experiencing a substantial increase in housing permits which will lead to more construction jobs.
Amazon is preparing to open its 800,000-square-foot Fulfillment Center in North Las Vegas and hiring 1,000 employees at an average hourly wage of $14.64. Amazon already employs around 6,400 employees in Nevada.
During the Las Vegas Metro Chamber of Commerce event on January 24, 2017, Kerry Bubolz, president of the Vegas Golden Nights hockey team stated that by time the first puck drops in October of 2017 they will have hired 150 full-time permanent employees. In addition, during the 44 home games at the T-Mobile Arena, the Knights will employ over 1,000 part-time employees and will have an annual payroll of over $100 million. Currently, the construction of the Knights practice facility at the corner of Sahara and Town Center in Summerlin is employing over 100 construction workers.
And while the Las Vegas Valley is not what it was during the boom years before the recession, the Las Vegas Convention and Visitors Authority have received approval for a 1.4 million-square-foot expansion of the convention center to expand the exhibition hall, pre-function areas, meeting rooms, service areas and support and circulation space. And while the LVAC will not be adding to its employee count, they will be employing hundreds of construction workers through 2022 with various construction phases.
And on the resort side, the $4 billion, 3,100-room Chinese-themed Resorts World Las Vegas, located on the site of the former Stardust Hotel, has been placing work platforms on site to inspect scaffolding. A worker on site explained that construction cranes are in short supply due to out of state construction projects, but that bids for five cranes have been made and they are expected to be in place by March 2017. The project is projected to generate more than 30,000 construction jobs, 8,000 permanent jobs and $155 million in annual tax revenue.
Finally, credit condition seems to have been slightly improving for local businesses from the last quarter. Nearly 22 percent (21.6) of the respondents applied for a line of credit in the last year. Of those, 62.5 percent were granted the credit line they wanted, exceeding the 57.7 percent value from the last quarter.
Of course, key on everyone’s minds is the election of President Trump. Will he keep his campaign promises of new fiscal stimulus and deregulation policies during the first two years of his tenure? Local business executives expect increases in federal infrastructure spending (60.5 percent) and federal defense spending (84.2 percent). They also expect decreases in federal government regulation (83.8 percent).
Next month, more insight from the Las Vegas Metro Chamber of Commerce Preview 2017 event, unless, we find something more interesting to report.