Southern Nevada received some positive economic news and what some might consider not such positive news about future population growth.
In June, the UNLV Lee Business School’s Center for Business and Economic Research (CBER) presented its annual economic outlook for the State of Nevada and the region of Southern Nevada based on various economic indicators and surveys of business leaders. The CBER also released its annual forecast for residential growth.
Currently, Southern Nevada has a population of approximately 2.32 million residents. However, more people are moving to Southern Nevada through migration, primarily from other states in the west, Midwest, and northeast, and predictions are that more than one million more residents will move into the region by 2060, increasing the number to 3.38 million.
While Nevada has benefitted from this migration since the end of the Great Recession, it has also caused a lot of growing pains in terms of infrastructure and crowding. CBER’s forecast gives policymakers and government agencies insight into how many people to expect to reside in Southern Nevada over the coming decades and influences decisions on everything from how many schools, police officers, firefighters, and doctors will be needed to sustain the growth. The forecast will also help predict water, electricity, and natural gas usage for the additional homes and businesses.
The complete population report can be found on the Clark County Demographics website.
On the economic side, indicators show that the post-COVID-19 induced recession economy is snapping back faster and more robust than expected. One of the surprising indicators that came out of the survey is that the Southern Nevada business leaders expressed the highest confidence record ever for Nevada and U.S. economic conditions. As to expectations for a full recession recovery, 12% anticipate it to happen by the end of 2021, while 56% expect it to take to occur in 2022.
Also, in a strong display of optimism, 44.4% of respondents forecast an increase in capital expenditure in their industry. However, recent shortages and supply chain constraints may slightly hamper this spending.
A majority of local business leaders are optimistic about their sales and employment levels after the full economic recovery compared to the pre-pandemic economy. When asked about their level of sales after the full recovery compared to their pre-recession positions, 68% of respondents forecasted an increase in sales, 16% expected no change, and 16% predicted a decrease. When asked about employment, 46% of respondents expected an increase compared to pre-recession levels, while only 8% expected a decrease. The remaining 46% predicted no change in employment after the full recovery compared to the pre-recession levels.
Despite the business confidence, the respondents mentioned economic uncertainty as the most difficult challenge for the fifth straight quarter, leading with 32%. Finding qualified employees was marked as the second most difficult challenge with 20%, which soared compared to 12.8% in the previous quarter. Among those who reported “others” as the most important challenge (22%), inflation and (material) supply issues were mentioned most frequently. Finally, the coronavirus (COVID-19), which previously scored as the second most important challenge with 24.4%, dropped to one of the least important challenges with 6% this quarter.
For those looking to purchase a home, now is better than later. The local and national housing market has exhibited a stronger-than-expected performance despite the virus. As a result of all-time low mortgage rates and surprisingly high demands, the inventory of homes for sale persistently remains at low levels, and the home prices continued to rise as a consequence. In addition, the local housing market has posted new record high median prices every month and does not show any signs of cooling down. Compounding the situation, recent increased building costs will push up the value of homes even more. As a result, local business executives predict that the upward trend of local housing prices will continue for the third quarter. When asked about expectations on home prices, 74.1% of the respondents expected increases in home prices in Southern Nevada, 16.7% forecasted no change, and 9.3% predicted decreases in home prices.
Local business leaders also express a highly positive outlook on construction activity. This may reflect a rapidly recovering economy fueled by high vaccination rates as well as federal relief money. When asked about expectations on construction, 72.7% of the respondents expected more construction activity, 21.8% projected no change, and 5.5% forecasted less construction activity in the third quarter compared to the second quarter of 2021.
The tourism sector in Clark County continues to show robust pick-ups, thanks to strong consumer spending fueled by strong federal and monetary responses to the COVID-19 recession. Still, April’s visitor volume remains 29.7% lower than the level from April 2019. In addition, the latest figures show that seasonally adjusted employment added 8,400 jobs in April, but the unemployment rate remained unchanged at 8.9%.
The increase in tourists and the relaxing of COVID-19 precautions (including mask requirements, social distancing, and crowd densities) and the new Delta Variant have increased the number of COVID-19 cases in Clark County and around the world. This has resulted in renewed concern and reinstatement of restrictions. These new restrictions are sure to influence the economic predictions and confidence levels, but to what extent is unknown.
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