Click image for enlargement. Graphic by Mike Johnson.

The local economy retreated in July as seven categories contributed negatively to an index of leading indicators, UNLV economist Keith Schwer said.

A drop in commercial permits and convention attendance contributed most heavily to the decline in the Southern Nevada Index of Leading Economic Indicators, which fell to 132.53 in July, down from 132.87 the previous month. The index was at 131.85 a year ago.

Both the U.S. and Southern Nevada economic indexes have been relatively flat this year, a further reflection of economic softening ahead. But no clear downward recessionary trend is apparent from the index, Schwer said.

"The interesting thing to watch is inflation signs, which would make the Feds run up interest rates and at the same time take a chance of slowing the housing market even further, and also oil prices," he said Tuesday.

The index, compiled by the Center for Business and Economic Research at University of Nevada, Las Vegas, is a six-month forecast from the month of the data, May, based on a net-weighted average of 10 series after adjustments for seasonal variations.

The accompanying Review-Journal chart includes several of the index's categories, along with data such as new residents and employment and housing numbers, updated for the most recent month for which figures are available.

Schwer, executive director of the research center, said his midyear economic outlook session was somewhat "pessimistic" in terms of a continuation of the robust economy we've had over the past few years. Some people estimate there's a 50-50 chance of recession at the national level, he said.

"Yeah, the economy is slowing," he said. "It can't grow forever at a high rate. That's very different than a precipitous decline in prices associated with the stock market. It's not a crash. That's not the case."

The housing market in Las Vegas shows several negative indicators, including a 30.8 percent decline in new home permits in June from the same month a year ago and a 25.9 percent decline in existing home sales, Home Builders Research reported.

The number of new residents moving to Las Vegas dropped 7.9 percent to 6,819, visitor volume fell 2.4 percent to 3.75 million and passenger count at McCarran International Airport was flat at 3.9 million.

Local travel and tourism, which posted strong growth during the current U.S. expansion, is now moving on a more modest growth path, a pattern observed in the national economy, Schwer noted.

Richard Truesdell, retail developer and president of Cornerstone Company in Las Vegas, said the city still has great job growth and more rooftops, keeping demand from retail tenants strong.

What's missing, he said, is competitive opportunity in grocery stores, which affects development of new shopping centers.

"But drug stores, restaurants, companies like McDonald's that I represent, they continue to seek out locations for new sites," Truesdell said.

New development is being absorbed as quickly as it's built, he said, and areas such as North Las Vegas are receiving attention for new malls and master-planned communities.

"Look at Southern Nevada's economy, with all the major development, look at Focus Group with four projects going and add (Garry) Goett (of Olympia Group) in North Las Vegas onto that, even with the housing hiccup, it's not all rosy in Southern Nevada, but it's hard to find where the world is coming to an end," Truesdell said.

As for the housing bubble that some analysts say has burst, Schwer said we need to define "burst."

"Prices have come down and they're on the market longer," he said. "There's not as many transactions because the flippers have left. The bubble is a qualitative assessment and it varies significantly from person to person."