Circus Circus and the former site of the Westward Ho are seen in June from the top of Sky Las Vegas. Construction, a key component in the Las Vegas Valley economy, is anticipated on the vacant Strip site as developers envision building high-rise condominiums. Photo by Jeff Scheid. Click image for enlargement. Graphic by Mike Johnson

The Southern Nevada Index of Leading Economic Indicators turned upward in June after two months of decline, suggesting continued economic prosperity for the remainder of the year, a local economist said.

On the basis of percentage change, all 10 categories of the index declined on a month-to-month comparison. However, after seasonal adjustments and weighting for relative contribution, only residential building permits dropped from a year ago.

The index, compiled by the Center for Business and Economic Research, posted a positive gain, moving to 132.87, up from 132.42 in May. It registered 130.68 in June 2005.

"Though winds of change at the national level continue to receive extensive coverage, we find no such signs in the Southern Nevada data," center director Keith Schwer said.

The index is a six-month forecast from the month of the data, April, based on a net-weighted average of 10 series after adjustments for seasonal variation.

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.

The Clark County Construction Index rose by 12.7 percent from a year ago to 191.19 in April, the 10th consecutive month of double-digit growth. Construction activity, particularly housing, has been a major factor in both national and local economic health over the past few years, Schwer said.

Construction employment has grown by more than 10 percent on an annual basis. Labor and material shortages have become a major issue in Las Vegas, all signs of strong demand, Schwer said.

Las Vegas is doing relatively well compared with other parts of the country but can't afford to ignore wages, said John Restrepo of Restrepo Consulting Group.

"I think something we need to watch is income growth. It's great to talk about population and job growth, but we do have relatively flat wages," he said. "The cost of living has increased at a greater rate than wages. We need to make sure people can afford to live in Las Vegas and we have the quality of life that continues to attract in-migration."

Numerous inflation measures have been on the rise and Federal Reserve Board members have been very vocal about the need to keep inflation under control, said Jim Shabi, economist for the Nevada Department of Employment, Training and Rehabilitation.

The Fed has used its primary tool for fighting inflation -- higher interest rates -- 16 times in the past two years and will likely use it some more, Shabi said.

So far, the state economy has felt only minimal effects of the national turmoil, he said.

"The housing markets in the Reno and Las Vegas areas have cooled from the unsustainable pace of the past two years, but have certainly not collapsed," he said.

Tourism and gaming numbers remain strong. Gaming revenue rose 13.9 percent in April to $824.2 million. Visitor volume was off 1.1 percent, but passenger count at McCarran International Airport increased 4.8 percent.

Schwer said the Clark County Tourism Index showed strength for April, gaining 1.7 percent from the previous month and 7 percent from a year ago. Most notably, reported hotel occupancy rate topped 90 percent for the third straight month and for the sixth time in the past year.

"In short, travel and tourism, having exhibited robust growth beginning in 2004, is growing at slower rates and is likely to do so in the future without additional room capacity," Schwer said.