The Southern Nevada Index of Leading Economic Indicators remained stable at 122.56 in February with six of the 10 data series contributing positively to the index, the UNLV Center for Business and Economic Research reported Tuesday.
The index is down 0.3 percent from 122.58 the previous month and down from 125.78 in February 2010. In contrast, the U.S. leading economic index grew by 0.8 percent in February.
Unlike the national index, the up-and-down pattern of the Southern Nevada index provides no clear indication of future economic expansion or contraction, said Bob Potts, assistant director of the research center.
What it does suggest is that the Southern Nevada economy is at or near the bottom and that the region’s economic recovery remains elusive, he said.
“I think the most important thing is how the U.S. indicator is going way up,” the research analyst said Tuesday. “My instinct tells me it’s optimistic. As the U.S. economy gains strength and people have more disposable dollars, it’s going to be good for us. We just haven’t felt it yet.”
Potts said he expects spending on travel and tourism to pick up and contribute to economic growth in Southern Nevada.
The largest contributor to the index was visitor volume, which totaled 2.88 million in December, the month of data used for the February index. The biggest drag on the index was gaming revenue, which totaled $733.8 million in December.
The economic index, compiled by the research center at the University of Nevada, Las Vegas, is a six-month forecast from the month of data, based on a net-weighted average of each series after adjustment for seasonal variation. February’s index is based on December data.
The Clark County Business Activity Index was essentially unchanged on a seasonally adjusted basis at 155.84 in December, though it fell 1.2 percent from a year ago.
Of the series comprising the index, employment is down 1.6 percent, gaming revenues are off 2.6 percent and taxable sales are up 2.8 percent.
Although the index slipped to its lowest level since June, the minimal decline indicates the local economy is likely at or near the bottom, Potts said.
The Clark County Tourism Index fell to 135.31 in December, down 0.6 percent from 136.16 in December 2009.
“The good news is we haven’t dropped and the anecdotal information I’ve seen is that next month’s numbers are going to be better than this month,” Potts said.
Key measures of the national economy showed positive movement in the fourth quarter, including employment growth, retail sales, construction and travel plans.
Personal spending increased 4.4 percent in the fourth quarter and still has room to grow, said Jake Joyce, project manager for Applied Analysis advisory firm in Las Vegas. The savings rate remains high at 5.3 percent, significantly above its 10-year average of 3.4 percent.
Consumers are paying down debt incurred during the latest business cycle and building net worth as housing prices declined considerably, Joyce said in a fourth-quarter report on national economic indicators.
“Once these measurements of financial security are met and consumers feel confident in the economy’s recovery, we are likely to see increased demand in consumer expenditures,” he said.
Contact reporter Hubble Smith at email@example.com or 702-383-0491.