The comeback continues.
Las Vegas made solid progress in its economic recovery in the third quarter, according to the Brookings Mountain West Mountain Monitor, a report that tracks the economies of 10 cities in the Intermountain West.
“The ongoing work of climbing out of a lot of wreckage continues, but across the board, there’s better and better information. The trends are positive,” said Mark Muro, a senior fellow and policy director with Brookings and one of the report’s authors.
Local home prices and job growth showed the best gains.
You already know the housing story: Similar to other reports, the Brookings study showed that home prices rose 22.6 percent year over year in the third quarter. That was No. 1 in the region, with Phoenix coming in second, at 18.1 percent, and it handily beat out the national average of 1.6 percent.
That kind of jump is especially important in Las Vegas, where real estate has historically played a big role in driving the economy, Muro said. What’s more, housing has a multiplier effect in a multitude of industries, from furniture sales to contracting. As it recovers, it helps growth in general.
“Heavy involvement in real estate is sort of the original sin of this crash, and the region, with its historical orientation toward real estate development, was greatly exposed,” Muro said. “Now, there’s some normalization of the real estate market, and that’s a broad background benefit for the overall economy.”
Nowhere is that broader benefit apparent more than it is in the jobs market. Unemployment in Las Vegas fell 0.6 percent from the second to third quarter, twice the rate of the next-closest drop of 0.3 percent in Albuquerque, N.M., and three times the national drop of 0.2 percent. Job growth jumped 0.8 percent from the second to the third quarter, on top of a 0.5 percent gain from the first to the second quarter. Job growth in the third quarter was fourth best in the region. Nationally, employment grew 0.3 percent in the third quarter.
What’s more important than actual numbers, though, is the source of the expansion. Yes, gaming and hospitality were still key, but Muro noted new, “modest” job-growth contributions from some of the seven target industries the Nevada Governor’s Office of Economic Development is looking to lure. In particular, the medical industry and the information-technology business systems sectors are playing a role.
“We’re seeing contributions now from a more diverse set of industries, so I think that is extremely good news,” Muro said.
None of that is to say Las Vegas doesn’t still face big challenges.
Fresh uncertainty about the direction of the world’s economy in developing nations such as China could place a “drag” on tourism, Muro said.
Also, some of the city’s stubbornly high unemployment may be coming from permanent, structural changes in the economy. The city will probably never see a housing-construction boom like the one it experienced from 2004 to 2006, and hotel-casinos have learned to operate permanently with fewer staffers per room.
“The damage that occurred, the hole the region found itself in and the disruption of households and lives remains profound,” Muro said. “Las Vegas is making its way through a vastly different environment now. There’s such uncertainty about where unemployment will go. Whether a good portion of it is structural is an extremely sobering question.”
Contact reporter Jennifer Robison at firstname.lastname@example.org. Follow @J_Robison1 on Twitter.