BY ALL INDICATIONS, PROGNOSIS NEGATIVE

Local economist Keith Schwer is looking for any hint of improvement in his Southern Nevada Index of Leading Economic Indicators.

For now, he doesn't see any.

The index fell to 129.56 in December, down from 129.90 the previous month. All 10 series of data declined from a year ago.

"It should, on average, bottom out six months prior to the economy (recovering), giving a signal of an upturn, but we see none," Schwer said Wednesday.

Instead, the continued drop suggests that the first half of this year will be one of economic weakness, he said.

The steepest decline came in commercial building permit valuation, which fell 90.3 percent in October from the same month a year ago to $35.9 million. Residential building permit valuation also showed a dramatic decline of 87.3 percent to $76.6 million.

The index, compiled by the Center for Business and Economic Research, is a six-month forecast from the month of data, based on a net-weighted average of each series after adjustment for seasonal variation. December's index is based on October data.

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 the proposed $775 billion economic stimulus package will help, but it's not going to be a quick fix.

"One critical factor is time, and I would suggest we made some mistakes in the past in dealing with major issues, when Lehman failed and their inability to address that," he said.

"It's going to take time because there are lots of things that are wrong," he added.

Southern Nevada's well-being is dependent on economic conditions elsewhere and what happens in Washington will play an important role in what happens here, he said.

Consumers aren't spending, so any economic stimulus has to come from the government. The tax rebate last year went straight into people's bank accounts to pay down credit cards and did nothing to stimulate the economy, Schwer said.

"Look at where we're going to go. It's very clear we're going to have to run some deficits and we're going to have to prime the pump. What's needed is timely expenditures targeted at areas that are weak in their economies," he said.

Las Vegas needs to get back to what has worked in the past, said Richard Lee, vice president at First American Title Co. New hotels such as Palazzo and Encore have opened recently and M Resort is scheduled to open in March. Those projects create jobs and attract visitors.

CityCenter and Fontainebleau will bring a different product to Las Vegas, he said.

"Meeting space works in Las Vegas," Lee said. "What doesn't work? Fifteen-dollar hamburgers, $200 steaks and $600 bottles of vodka."

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