Index shows local economy foundering

Southern Nevada's economic indicators show no signs of recovery and suggest the recession will last through the rest of the year, a local economist said Tuesday.

All but one series of data in the Southern Nevada Index of Leading Economic Indicators declined from a year ago, dragging the index to 126.69 in March. That's down from 127.23 in February and from 131.94 in March 2008.

If the recession continues throughout 2009, it will be the longest recession in Southern Nevada since the 1930s, said Keith Schwer, executive director at the Center for Business and Economic Research at University of Nevada, Las Vegas.

Double-digit declines in visitor volume and gaming revenue expose the weakness of Las Vegas' tourism industry. Fewer people are coming here and those who do come are spending less.

"For us, it's lack of consumer spending," Schwer said. "It's going to take time for consumers to deleverage, to reduce their borrowing and buying. The same is true with businesses. They're in a period of deleveraging. They're laying off people and not making investments."

The economic index, compiled by the UNLV research center, is a six-month forecast from the month of data, based on a net-weighted average of each series after adjustment for seasonal variation. March's index is based on January 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.

Rosemarie Hughey of Go-VegasFirstClass travel agency said she heard a woman from Texas say you can't blame the economy for everything.

"Was she ignorant or just behind rocks?" Hughey said. "How much unemployment do we have? Where does our money come from? People who have businesses are struggling to keep them and people who have jobs are wondering if they'll have one tomorrow. Two-income families are down to one.

"Why would someone travel to Las Vegas with a good conscience and leave this all behind and act like nothing happened?"

Schwer said other economic forecasts that extend for a longer period of time offer little encouragement for improvement in 2009.

One of the things he doesn't monitor for the local index is the stock market. It's a component of the U.S. economic index that merits more attention now, he said. The markets tend to move up before companies see any profits.

The Clark County Business Activity Index dropped to 169.55 in January from 180.87 in December. Latest data from the Nevada Department of Employment, Training and Rehabilitation show total employment falling to 880,000 in January from 921,400 a year ago.

"Again, job losses can be expected to continue throughout the recession and into recovery," Schwer said. "With current unemployment at the 10 percent level, we face further hardship."

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