Construction employment makes steady rebound in Southern Nevada

Southern Nevada’s construction sector started 2016 strong.

Employment spiked 8.3 percent year over year in February, as billion-dollar projects papered drawing boards across the Las Vegas Valley.

Right about now, you’re probably sighing: “Haven’t we been here before?”

Not exactly, industry observers say.

Sure, today’s building boom shares echoes of the market’s frenetic pace before 2007, when the building bust hijacked the local economy and held it hostage for half a decade.

But this time, the activity is manageable. Those surging growth rates come mostly from the fact that construction came to a standstill in the recession. Population growth, job gains and record visitor volumes mean the building sector should continue to expand at its rate today through 2016, and likely into 2017, experts say.

“While they look nothing like they did at the height of the market in 2006, the fundamentals within the construction industry look much more stable at their current levels,” said Brian Gordon, a principal in local economics research firm Applied Analysis. “The off-the-chart growth rates of a decade ago were clearly unsustainable. Our construction industry is better-positioned today.”

A look at the numbers

Nowhere is Nevada’s construction bust more obvious than in its job numbers.

Building jobs peaked at 148,000 in 2006, and plummeted 68.4 percent to 46,700 in 2012.

Taxable sales traced to construction reached $144 million in January 2009 but dove 78 percent to $31.8 million in January 2012.

Those numbers have bounced back markedly in the last two years.

Employment is up 56.7 percent from its low, to 73,200 in February. Taxable sales were up 60.1 percent in January, the latest month with available numbers, to $50.9 million.

Mike Shohet, president of commercial construction trade group NAIOP Southern Nevada, said he sees the gains in his association’s membership rolls, which were up 10 percent year over year at the end of 2015 to more than 400.

Membership in the Nevada Contractors Association soared 25 percent from mid-2014 to the end of 2015, though it fell by nearly 40 percent in the downturn, added Sean Stewart, the group’s executive vice president.

“It’s definitely interesting times,” Stewart said. “When I speak with contractors and employees, there’s a lot of optimism. People are excited. They understand it’s a different growth pattern, and that it could potentially be very good for Nevada.”

That growth pattern has been broad, spreading to virtually every corner of the building industry.

Housing recovery helps

The recovery began picking up speed in 2013, with a small revival in housing, and took flight in 2014 with an upsurge in industrial and retail construction. Thanks in part to a 2 percent population growth rate that’s running roughly three times the national average, new-home permits have doubled, from a 2011 low of 3,700 to today’s 7,500 annual closings, though that’s still a fraction of the 33,000 permits local builders pulled in 2004.

Where there’s population growth, there’s demand for new services. Enter the $1.2 billion, 155-acre Union Village near U.S. Highway 95 and Galleria Drive. The health care-centered project, under construction now, will include hospitals, retail, cultural centers and senior living when it’s complete in about a decade.

Big shopping and dining projects have bolstered construction, too, including the 1.6 million-square-foot Downtown Summerlin; the 55,000-square-foot Grand Bazaar Shops at Bally’s; MGM Resorts International’s 3-acre The Park at T-Mobile Arena; and a 40,000-square-foot retail project fronting Treasure Island.

Even the resort sector gave an assist as visitor volumes reached new records in 2014 and 2015. Light site work started in 2015 on the Strip’s $4 billion Resorts World Las Vegas, and building went vertical on the $373 million, 201-room Lucky Dragon hotel and casino on Sahara Avenue just west of Las Vegas Boulevard. The $375 million T-Mobile Arena, a joint venture between MGM Resorts and AEG, opened April 6.

Strength in industrial

But few construction subsectors have surged like the industrial market.

TWC Construction saw the swing coming in October 2014. That’s when developer Prologis enlisted the Las Vegas builder to put up what was then the largest local speculative industrial space in a decade — the 464,000-square-foot Las Vegas Corporate Center No. 19 at Pecos and Gowan roads.

Many more industrial spec spaces would follow, driven in large part by a strong e-commerce market: Today, the market has nearly 6 million square feet of spec industrial space in the works, though some of that might not get built if leasing activity slows.

Still, “if half of what we see coming across our desk is built, it’s going to be a good market for all of us,” said TWC’s CEO, Matt Ryba.

Thanks to the boom, TWC’s business volume soared as much as 60 percent in 2014 and 2015, Ryba said. The contractor’s full-time employee base is up more than 35 percent, to around 30 people. Company executives anticipate revenue gains of another 20 percent to 25 percent in 2016, though the employee roster likely won’t grow that much.

That slower employment growth won’t be the case in general.

A spur to suburban retail

Job gains in construction should stay at their current levels at least through 2016, observers said.

“We see growth in all sectors,” said Stewart, forecasting another year of roughly 10 percent annual gains in the jobs base.

Gordon said that should include the residential side, where a passel of apartment projects including The Constellation in Summerlin and The Mercer at Tropicana Avenue and Grand Canyon Drive, will supplement steady demand for new single-family homes.

The new rooftops will spur additional suburban retail, particularly in underserved markets such as the southwest, Shohet said.

Plus, a new, local gasoline tax has fueled nearly $1 billion in revenue for public-works projects in Southern Nevada, such as the $559.4 million Project Neon, the 3.7-mile overhaul of the Spaghetti Bowl interchange between Interstate 15 and U.S. Highway 95.

What’s more, two planned megaresorts — Resorts World Las Vegas and Alon — won’t reach peak construction until they’re close to the middle of their building timeline, Gordon said. If both projects pick up on schedule in 2017 and 2018, that could mean sustained labor demand beyond this year. Construction’s current growth rate is sustainable for the next two years if all projects in planning move forward, he added.

But that could mean labor shortages.

TWC has been “fortunate” for now in finding enough people, said Mark Wilmer, the company’s executive vice president.

“It’s been an employer’s market for us. There’s a lot of good talent looking to get back into the game,” Wilmer said.

Others are struggling, though. It’s tough to find qualified workers in some trades, particularly carpenters, drywallers, electricians and, in the resort sector, millwork and upholstery, Shohet said.

And even with today’s bumper crop of jobs, the city’s construction jobs market will likely never return to its peak.

That doesn’t disappoint industry watchers.

“We know that level of growth and expansion can have negative repercussions when economic conditions slow down, and that type of unsustainable pace of growth probably isn’t something the community should be striving for,” Gordon said.

Added Shohet: “It was a little bit irrational at that time. A lot of projects got built that probably shouldn’t have been built.”

Contact Jennifer Robison at Find @_JRobison on Twitter.

The Venetian gondoliers sing Italian songs
Gondolier Marciano sings a the classic Italian song "Volare" as he leads guests through the canals of The Venetian in Las Vegas. (K.M. Cannon/Las Vegas Review-Journal)
Building In Logandale
Texas homebuilder D.R. Horton bought 43 lots in rural Logandale. (Eli Segall/Las Vegas Review-Journal)
Indoor farming in Southern Nevada
Experts discuss Nevada's indoor farming industry. (Bailey Schulz/Las Vegas Review-Journal)
Former Fontainebleau could have become a Waldorf Astoria
Months after developer Steve Witkoff bought the Fontainebleau last summer, he unveiled plans to turn the mothballed hotel into a Marriott-managed resort called The Drew. But if Richard “Boz” Bosworth’s plans didn’t fall through, the north Las Vegas Strip tower could have become a Waldorf Astoria with several floors of timeshare units. (Eli Segall/Las Vegas Review-Journal)
LVCVA CEO Rossi Ralenkotter announces plans to retire
Rossi Ralenkotter, CEO of the LVCVA, on Tuesday confirmed a Las Vegas Review-Journal report that he is preparing to retire. Richard N. Velotta/ Las Vegas Review-Journal
Cousins Maine Lobster to open inside 2 Las Vegas Smith’s stores
Cousins Maine Lobster food truck company will open inside Las Vegas’ two newest Smith’s at Skye Canyon Park Drive and U.S. Highway 95, and at Warm Springs Road and Durango Drive. Cousins currently sells outside some Las Vegas Smith’s stores and at Fremont Street and Las Vegas Boulevard. (K.M. Cannon/Las Vegas Review-Journal)
Las Vegas home prices to continue to rise, expert says
Lawrence Yun, chief economist at the National Association of Realtors, gives homebuyers a pulse on the Las Vegas housing market. (Eli Segall/Las Vegas Review-Journal)
NV Energy announces clean energy investment
The company is planning to add six solar projects in Nevada, along with the state's first major battery energy storage capacity. Bailey Schulz/Las Vegas Review-Journal
3 Mario Batali restaurants on Las Vegas Strip to close
Days after new sexual misconduct allegations were made against celebrity chef Mario Batali, his company announced Friday that it will close its three Las Vegas restaurants July 27. Employees of Carnevino Italian Steakhouse, B&B Ristorante and Otto Enoteca e Pizzeria, all located in The Venetian and Palazzo resorts, were informed of the decision Friday morning. Bastianich is scheduled to visit the restaurants Friday to speak to employees about the next two months of operation as well as how the company plans to help them transition to new positions.
Nevada has its first cybersecurity apprenticeship program
The Learning Center education company in Las Vegas has launched the first apprenticeship program for cybersecurity in Nevada. It was approved by the State Apprenticeship Council on May 15. (K.M. Cannon/Las Vegas Review-Journal)
Las Vegas union members voting to authorize the right to strike
Thousands of Las Vegas union members voting Tuesday morning to authorize the right to strike. A “yes” vote would give the union negotiating committee the power to call a strike anytime after June 1 at the resorts that fail to reach an agreement. (Todd Prince/Las Vegas Review-Journal)
Small businesses struggle to find qualified candidates
A 2018 survey found that over two-thirds of small businesses in Nevada find it somewhat to very difficult to recruit qualified candidates. Bailey Schulz/Las Vegas Review-Journal
Nevada secretary of state website offers little protection against fraudulent business filings
Property developer Andy Pham tells how control of his business was easily seized by another person using the secretary of state website.
Caesars may be going solo in its marijuana policy
Several Southern Nevada casino companies aren’t following Caesars Entertainment’s lead on marijuana testing.
How much is the Lucky Dragon worth?
Less than a year-and-a-half after it opened, the Lucky Dragon was in bankruptcy.
Gyms and discount stores take over empty retail spaces
Grocery stores used to draw people to shopping centers. But many large retail spaces have been vacant since 2008. Discount stores like goodwill and gyms like EOS Fitness are filling those empty spaces, and helping to draw shoppers back in. K.M. Cannon/Las Vegas Review-Journal
Funding source of Las Vegas stadium for the Raiders is sound, expert says
The stadium is funded in part by $750 million of room taxes, the biggest such tax subsidy ever for a professional sports stadium. Robert Lang, executive director of Brookings Mountain West and The Lincy Institute at UNLV, says that is a good use of public funds. (Richard Velotta/Las Vegas Review-Journal)
Las Vegas needs light rail, expert says
Robert Lang, executive director of Brookings Mountain West and the Lincy Institute said he is afraid of a "congestion mobility crisis." Las Vegas needs a light rail system, he said, to accommodate the city's growing number of attractions. (Richard Velotta/Las Vegas Review-Journal)
Three takeaways from Wynn Resorts' Earnings Call
Matt Maddox came out swinging in his first earnings conference call as Wynn Resorts chief executive officer, boasting of record Las Vegas quarterly revenues and applicants lining up for work.
Star Wars VR Comes to Las Vegas
Sneak peak at the new "Star Wars: Secrets of the Empire" VR experience at the Grand Canal Shoppes.
Elaine Wynn continues her fight to change Wynn Resorts board
Elaine Wynn, the largest shareholder of Wynn Resorts Ltd., is seeking to kick a friend of her ex-husband Steve Wynn off the company’s board of directors. (Todd Prince/Las Vegas Review-Journal)
Zillow is getting into house flipping in Las Vegas
Las Vegas Review-Journal real estate reporter Eli Segall says flipping houses has waned in popularity after the housing bubble burst.
Ellis Island Buys Mt. Charleston Lodge
Ellis Island, which operates a casino, brewery and hotel just off the Strip, purchased the Mt. Charleston Lodge in early April.
Casinos to be penalized for allowing drug-impaired customers to gamble
Nevada Gaming Commission Chairman Tony Alamo talks about an amendment making casinos subject to the same disciplinary standards of preventing people to gamble if impaired by drugs as they are for letting them play while intoxicated by alcohol.
Terrible Herbst to open large travel center in Southern Nevada
The 50,000-square-foot commercial travel center will include 96 fuel pumps and the third White Castle restaurant in Southern Nevada. Wade Tyler Millward reports.
Art Bell’s Top 10 Shows
A selection of radio host Art Bell’s most popular shows.
Hooters owner talks about room upgrades at his hotel-casino
George Ruff, founder and senior principal of Trinity Hotel Investors L.L.C., owner of Hooters Hotel and Casino in Las Vegas, talks about recent room upgrades at the hotel. K.M. Cannon/Las Vegas Review-Journal
Passengers Discuss Allegiant Air
Allegiant Air passengers voice their views on the airline at McCarran International Airport on April 16, 2018. (Bailey Schulz/Las Vegas Review-Journal)
Longtime Las Vegas attorney John Momot dies at age 74
Criminal defense attorney John Momot, who represented mob figures and even played himself in the movie “Casino,” has died.
Trump Slams Amazon for Not Paying Enough in Taxes
Trump Slams Amazon for Not Paying Enough in Taxes Trump tweeted his concerns about the company on Thursday. This isn't the first time Trump commented on the issues via Twitter. August 2017 December 2017 Amazon did hold back on paying state taxes in 1995, but the company has been routinely collecting state sales taxes since then. In 2016, the company's report from the Securities and Exchange Commission confirmed it paid $412 million in taxes.
News Headlines
Home Front Page Footer Listing
You May Like

You May Like