Juhl construction's mixed-use project at Bonneville Avenue and Third Street is one of many projects under way in Las Vegas. Photo by Ronda Churchill.

Nearly $30 million in construction projects on the Strip will carry Las Vegas through the next couple years of slowed construction in the residential market, economic analyst John Restrepo said Tuesday at a presentation for the Nevada Contractors Association.

Las Vegas will probably experience a continuing decline in residential building permits, which dropped to 33,000 in 2006 from a peak of 40,000 in 2005, Restrepo said. The next two years will return to the 30,000 level of 2003, he said.

Commercial and residential permit values totaled $4.4 billion in 2006, and that's also starting to fall from its peak.

Construction still accounts for 12 percent of total employment, about twice the national average, and Las Vegas is posting 6 percent job growth, also twice the national average, the principal for Restrepo Consulting Group noted.

"Construction employment is not generally long term and stable," he said. "Construction job growth had a big boom since January 2003 and was starting to slow in '05 and '06 and probably will continue downward, mostly because of the home building industry. Still, it's pretty significant growth over the last few years."

Kris Sundell, vice president of Stewart and Sundell Concrete and chairman of the Nevada Contractors Association, said his company's annual revenue had been increasing until last year. More concrete is available, which has kept prices down.

"Things have slowed, but we're optimistic that the market will pick up," he said. "People continue to move here and they've got to have a home. All the work on the Strip means there's a lot of work out there for the construction industry."

Restrepo said Las Vegas' population is expected to increase 53 percent from 2006 to 2024 to nearly 3 million people. That's creating the "sprawl" that everyone hates, bedroom communities 60 miles from the city, but it's the only way to go, he said.

Population growth is tied into employment growth, Restrepo said.

"Most people don't come here for the weather in August or the streams and the rivers and the forests. They come here for jobs," he said.

Among the challenges for the local economy are housing affordability, water supply and transportation, Restrepo said. Interstate 15 is choked daily and McCarran International Airport is at near capacity, with 48 million passengers in 2006.

"I guarantee you our casino clients are very concerned about this," he said.

Vacant land prices have gone from $367,000 an acre in 2004 to $597,000 an acre and will never get back to where people want them to be, Restrepo said.

That's keeping companies such as Caribou Coffee from Minnesota out of the market. They backed off plans to compete with Starbucks when they saw 3 percent retail vacancy and the price of land and construction, Restrepo said.

A 2006 report from the Southern Nevada Coalition for Fairness in Construction estimates that more than 110,000 Southern Nevadans are employed in construction trades.

Irene Porter, a member of the coalition and president of Southern Nevada Home Builders, said recent home builder layoffs reflect a slowdown in the housing sector as both builders and buyers are finding the present market "somewhat daunting."

Affordability and price stability are both industry concerns, she said. Still, the home building industry generated $643 million in major source tax payments during the past year, second only to Nevada's leisure and hospitality industry, she noted.

Restrepo said another problem on the horizon is the personal savings rate that turned negative by 1.4 percent in December. Combine that with subprime lending practices, and Restrepo said he can see why Nevada foreclosures rose to 6,900 in the fourth quarter, up from 5,800 in the previous quarter and more than double the year-ago period.