Maybe it’s time to change the definition of economic recovery.
None of the key economic indicators in think-tank Brookings Mountain West’s newest Mountain Monitor have returned to their pre-recession levels. But looking for jobs, housing and productivity numbers to match boom-era highs may be the wrong way to measure Southern Nevada’s post-recession health, said Mark Muro, a senior fellow and policy director in the Brookings Metropolitan Policy Program and Washington director of Brookings Mountain West.
Rather, recovery is “steady, plodding, broadly based progress, without hypergrowth,” Muro said.
And that’s something Southern Nevada can finally, officially lay claim to, according to the Brookings study, which tracks recession and revitalization across the Intermountain West.
“It’s very clear that there’s a very steady, fairly broad recovery underway in Las Vegas, and it’s distributed across a lot of industries,” Muro said. “Las Vegas is piling up a series of quarters of pretty decent performance.”
Output, which measures gross metro product, was up 1 percent from the first quarter to the second, compared with a national average gain of 0.8 percent. Unemployment fell by 0.9 percent, outpacing a countrywide drop of 0.6 percent. And house prices advanced 2 percent against a U.S. gain of 1.3 percent.
Only job growth failed to outpace national levels. The Las Vegas Valley’s 0.3 percent increase in employment lagged a nationwide improvement of 0.5 percent.
“Nobody is writing home about how wonderful it is, but you seem to be stable, and you’re outperforming a number of places in the region,” Muro said.
Credit some of the growth to broader improvements in the U.S. economy. Consumer spending is recovering at a “modest” rate, Muro said. Because Southern Nevada’s tourism-oriented economy relies heavily on discretionary dollars, the region gets a boost when consumption rises nationally.
Those spending trends should continue in the near term, with experts forecasting a strong year for nationwide economic growth.
“If that happens, the recovery in Las Vegas will extend and grow,” Muro said.
There are headwinds, though. The valley is still “hugely exposed” to the consumer economy — a long-term problem if the global economy slows, Muro said. And though Nevada’s economy is diversifying and electric carmaker Tesla recently announced it would build a $5 billion battery factory near Reno, the state lacks the high concentration of technology jobs of stronger markets such as Seattle, San Diego, Boston and Washington, D.C., he added. That needs to change for the state to better weather future downturns.
Information technology was one of seven sectors Brookings recommended that state officials target in their bid for a more diverse economy.
“It’s an aspiration for the state to build a presence in these high-innovation, high-growth spaces. You’re not going to compete directly with San Francisco, but a toehold in those industries would really advance diversification for the state,” Muro said.
Contact reporter Jennifer Robison at firstname.lastname@example.org. Follow @J_Robison1 on Twitter.