Analyst says Southern Nevada economy has ‘stalled out’

The Southern Nevada Index of Leading Economic Indicators stayed on its up-and-down course from the past couple of years, slipping 0.52 percent in June to 122.89, the UNLV Center for Business and Economic Research reported.

Six of the index's 10 data series showed declines from a year ago and seven of the data series contributed negatively to the index, the heaviest of which was gross gaming revenue.

The index pattern gives little reason to believe Southern Nevada's employment picture will show any substantive improvement over the next four to six months, said Bob Potts, assistant director of the research center.

"I look at these things and at best we just keep holding our own, other than construction, which keeps dropping," Potts said Friday from University of Nevada, Las Vegas. "Tourism is up just slightly year over year, but the overall economy has stalled out."

Residential building permits were down nearly 30 percent from a year ago, and the value of those permits decreased nearly 12 percent, the index showed. June's index is based on April data.

Commercial permits dropped 52.6 percent, but the value increased 164 percent to $21.9 million.

The index measured a 0.9 percent decrease in taxable sales, a 3.9 percent decrease in gallons of gasoline and a 1.1 percent decrease in gaming revenue. Besides commercial permit valuation, the gainers were visitor volume (4.8 percent), McCarran International Airport passengers (2.3 percent) and convention attendance (2.2 percent).

The economic index, compiled by CBER, is a six-month forecast from the month of data, based on a net-weighted average of each series after adjustment for seasonal variation.

A separate Clark County Business Activity Index declined by 2.73 percent in April and stands at 156.21, down 1.64 percent from a year ago. The index combines gaming revenue, taxable sales and employment data.

The Clark County Tourism Index also fell from its March value as gaming revenue decreased 18.3 percent and airport passenger count decreased 2.9 percent. Despite the monthly decline, the tourism index is up 1.58 percent from a year ago at 137.78.

The Clark County Construction Index continued its slide as builders wait for the excess supply of homes and commercial buildings to be absorbed. Construction employment fell 15.6 percent, residential permits 29.8 percent and commercial permits 52.6 percent.

"Construction just keeps dying," Potts said. "Quite frankly, everything is on life support right now."

But Rick Phillips, president and chief investment officer of Las Vegas-based Main Street Capital Advisors, said it looks like the overall economic health is improving slightly. A big part of that is gasoline prices coming down from $4 a gallon to about $3.50, he said. That's important for drive-in traffic from Southern California.

Municipalities are seeing increases in many categories for taxable sales and are being careful not to count on property tax growth as they did in the past, Phillips said.

"They're still pessimistic about property tax revenue because of house values," he said. "I still do worry about housing inventory. That's my biggest concern."

Contact reporter Hubble Smith at
hsmith@reviewjournal.com or 702-383-0491.