Commercial tenant improvement work for Larry Johnson, above, and Blackstone Builders rose 35 from 2005 to 2006. Nevertheless, the Clark County Construction Index has dropped 18 percent from a year ago. Photo by John Locher. Click image for enlargement.

Larry Johnson hasn't noticed much of a downturn in the Las Vegas economy.

His company, Blackstone Builders, did about $3 million in commercial tenant improvement work in 2006, up 35 percent from the previous year, and he expects to do about the same this year. His custom home work will probably grow to $1 million, up from $300,000 to $500,000 last year.

"I've seen the trends go up and down for 12 years," Johnson said. "We saw a decrease in construction in October and November, but we're seeing an increase in the beginning of the new year."

With residential home building down about 25 percent for the year, the Clark County Construction Index has dropped 18 percent from a year ago, contributing to yet another monthly slide in the Southern Nevada Index of Leading Economic Indicators.

There was a loss of 200 construction jobs in October and permitting activity has shown a pronounced decline, particularly on the residential side, economist Keith Schwer said in his monthly report on leading indicators.

The index dropped to 131.91 in December, compared with 132.02 in November and 132.16 in the same month a year ago. Eight of the 10 indicators contributed negatively to the index.

"It is clear that the period of robust growth that we have experienced since 2002 has ended and a new period of no growth and no decline has begun," said Schwer, executive director of the Center for Business and Economic Research at University of Nevada, Las Vegas. "The evidence suggests modest change rather than a recession in the months ahead."

The index is a six-month forecast from the month of the data (October), 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.

Employment growth continues to be a positive indicator for Las Vegas, which leads the nation at 4.9 percent.

Johnson of Blackstone Builders said he's added a few employees since starting his business in 2004 and he's had to let a few go. While most of the labor being swallowed up by MGM Mirage's $7 billion Project CityCenter on the Strip involves union trades, it still diminishes the pool of subcontractors available for other construction work in the valley, Johnson said.

"It gets back again to finding qualified help," he said. "You've got to try them out to find out if they're any good. Anybody can be a laborer, but a carpenter is a little more specialized. With carpentry work, it's all about craftsmanship. You've got two pieces of wood to put together and you want a nice, tight fit and finish between them. If the quality of his craftsmanship isn't there, you've got to go back and do it over. It always costs more to do the job the second time than the first time."

December's economic index showed a 41 percent decline in October residential permit building valuation to $170.9 million. The number of commercial permits dropped to 84 from 121 in October 2005, but commercial building valuation grew 9.6 percent to $150.7 million.

Clark County gaming revenue rose 0.6 percent to $889.9 million and taxable sales were flat at $2.82 billion. Visitor volume and passenger count at McCarran International Airport increased by 2.5 percent and 5.6 percent, respectively, in October.

Schwer said the tourism index grew to 163.25 in October, recovering from a loss in September. As such, the index is bumping up against its May peak of 165.36.

Major data components of the index reveal good economic performance, including hotel occupancy above 90 percent for the fourth straight month, Schwer said.