Last month, the Las Vegas Metro Chamber of Commerce held their annual Preview La Vegas event where over 100 local businesses and organizations set up booths to inform residents about their goods and services.
This year’s event introduced the president of the Vegas Golden Knights, Kerry Bubolz, and Nehme Abouzeld, senior vice president/chief marketing officer who spoke about what professional hockey will bring to the community, including their dream for the coveted Stanley Cup. Local economist John Restrepo reported on where we have been economically along with predictions on where we are going. Robert Lang, Ph.D., Executive Director, Brookings Mountain West and professor of sociology at UNLV shared his thoughts as to how Nevada can improve its economy.
In case you were not able to attend Preview Las Vegas 2017, the following is a recap of the highlights provided by the UNLV Center for Business and Economic Research (CBER).
For the first time since the “Great Recession,” the Southern Nevada economy has either reached or exceeded prerecession levels in some areas while continuing to make steady progress towards recovery in other areas. One of the bright spots is the employment number which, as of November 2016, was 1.1 percent above its prerecession peak.
As a result of employment growth, the Las Vegas unemployment rate has fallen sharply. The November 2016 seasonally adjusted unemployment rate is 5.3 percent, which is 1.1 percentage points below last year’s November rate and down from the peak unemployment rate of 14.0 percent in late 2010.
Another bright spot is the CBER Southern Nevada Coincident Index which is compiled monthly by combining the Southern Nevada taxable sales, gross gaming revenue, and nonfarm employment. Currently, the Coincident Index has recovered 101.4 percent of its lowest point, 210, during the recession to a new height of 252.
According to CBER, gross gaming revenue has always shown volatility, note the jagged, but constantly upward moving, growth line on the chart below. However, since the recession, revenues have fluctuated dramatically but have only recovered about 24.8 percent from the recession low.
Despite the sluggish gaming revenue rebound, tourism has recovered 98.6 percent of its loss from the great recession. McCarran passenger volume has begun to grow at a brisk pace generating a 3.3 percent increase year over year with 4.1 million passengers arriving each month. Hotel occupancy rates have also risen, exceeding 90 percent in three of the last six month, ending November 2016.
A sign of a still-slow economy, tourists are arriving in larger numbers but not spending as many dollars.
One of the interesting statistics about the Southern Nevada economy is how much less we are relying on the leisure & hospitality and construction industries for employment.
The leisure & hospitality employment fell from 35 percent of the total employment in 1994 to 30.2 percent in 2016. In that same period construction industries fell from 10 percent of the total employment down to around 6 percent.
Increasing as part of the total employment is education and health services which rose from 5.5 to 10.0 percent, as well as, professional and business services that rose by 4 percent.
Construction, which took that biggest hit during the great recession, is not anywhere close to what it was pre-recession. Housing permits, which went from around 4,000 per month to about 500 per month, now average just over 1,000 per month. Commercial dropped from around 125 per month to about 25 per month during the recession and now averaged somewhat more than 30 per month.
When talking about commercial vacancy rates, the office market vacancy remains the highest at just above 20 percent, with retail at about 7.8 percent, and industrial down around 6.2 percent.
If you are worried about your business economy and insufficient cash flow, call us Business Finance Corporation, we may be able to help.
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