After two months of gains, the Southern Nevada Index of Leading Economic Indicators gave a little back, slipping to 123.33 in January for a 0.31 percent decline from the previous month, the UNLV Center for Business and Economic Research reported Wednesday.
Seven of the 10 data series contributed negatively to the index, which is weighted and adjusted for seasonality and inflation. Residential building activity and gasoline consumption held it up.
Although the downturn in the index is not a positive signal, it is a one-month downturn in a series that has been trending up, said Bob Potts, assistant director of the research center at the University of Nevada, Las Vegas.
The up-and-down pattern is likely to continue as the Southern Nevada economy slowly improves, he said.
"We’re trending out of this thing. It’s slow and it’s going to be bumpy, but all of the data show we’re pulling out of this. Construction is still struggling and it’s going to struggle for a while," Potts said.
Permit activity was mixed compared with 2010. Residential building permits increased 61.5 percent to 289 in November, the month of data used for the economic index, and residential permit valuation jumped 66 percent to $36.6 million. Commercial activity declined 38.1 percent. Industry employment is down to 42,700 from a peak of 112,300 in June 2006.
Gallons of gasoline used decreased 1.8 percent to 58.7 million, but contributed positively to the index after seasonal adjustment, said Potts, who is taking a job as research analyst for the Governor’s Office for Economic Development later this month.
One series he calls a "hallmark" is taxable sales, which increased 8.6 percent from a year ago to $2.47 billion in November. Even when adjusted for inflation, it’s still sitting over 5 percent, Potts said.
Visitor volume, gaming revenue, airport traffic and convention attendance all posted year-over-year gains in November, but were down from the previous month, pushing the Clark County Tourism Index down to 137.99. It was at 152.69 in October and at 131.61 in November 2010.
Despite the recent declines, the travel and tourism sector continues to take the lead in pulling Southern Nevada out of recession, Potts said.
"Even though some indicators are soft, the story this month is we’re trending up," he said. "There is certain risk involved with consumer spending and other international economies."
The tourism industry shed 3,000 jobs in December, but overall has gained 10,000 jobs in the last 12 months, RCG Economics principal John Restrepo said. Another 2,000 jobs were added in health care and hospitals, he said.
Restrepo calls 2012 a "bridge year" for Southern Nevada’s economy. The private sector job market has been generally improving during the last 12 plus months, suggesting that a moderate recovery has taken hold. Conversely, the housing market and public sector job market remain as a drag on the recovery, and that’s a concern, he said.
"We’ll see moderate growth in some sectors and fewer job losses in others," Restrepo said. "What I’m most optimistic about is the level of attention by the business community for a strategic plan for economic development based on realism rather than sound bites and slogans."
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