Las Vegas ranked second-to-last among the nation’s 100 largest metropolitan areas in making progress toward economic recovery through the third quarter, Brookings Mountain West reported in its December Mountain Monitor.
The severity of the Great Recession has been well documented in Las Vegas through the housing market crash, foreclosure crisis, massive job losses and slowdowns in tourism and gaming.
One year after Brookings began tracking the Intermountain West region, Southern Nevada’s economy has more or less stabilized, though evidence of a robust turnaround remains elusive, the report said.
Pete Poggione certainly hasn’t seen it. The owner of Squeez Marketing firm in Las Vegas said he feels fortunate that his client base has been relatively stable, but they’ve all cut back and now operate with a much higher level of caution and with a watchful eye on their marketing budgets.
"Honestly, it’s what every business needs to do. Find a way to get more out of less, and you stand a chance of not just surviving, but thriving if you do it better than your competition," Poggione said.
Las Vegas continued to show declines in every component of Brookings’ composite index except gross metropolitan product, which inched up 0.1 percent in the third quarter.
Employment contracted 0.3 percent in Las Vegas as well as across the 100 metro areas as a whole. While the national employment level appeared to bottom out in the first quarter, Las Vegas was among 32 metro areas that saw employment continue to fall through the third quarter. One out of seven jobs has been eliminated from Las Vegas’ peak employment in 2007.
Unemployment nearly doubled in Las Vegas from September 2008 to September 2009, jumping to 13.5 percent. Since then, the unemployment rate edged up slowly to 15 percent, though the most recent report has it at 14.3 percent.
Nonetheless, this relatively modest increase was the largest posted by any major metro during the last quarter, Brookings found. The unemployment rate increased by more than 1 percentage point in only five other markets, four in California.
Las Vegas is not going to see a spike in hiring or job creation anytime soon, John Restrepo of Restrepo Consulting Group said Monday. Businesses are conserving capital and doing more with less staff, he said.
"The only thing that really can be done to help Las Vegas recover is a massive job creation bill through infrastructure investment, and there’s no political appetite for that right now," the economic consultant said. "Barring that, the economy will have to recover organically and that would lead to local recovery. As you can see from the indicators, the recovery is going to be slow and plodding."
Restrepo said Las Vegas needs to see six months of consistent job growth and at least six months of home price gains before the economy can be considered in recovery. The "X factor" is what happens relative to state budget issues, he added.
Las Vegas did not experience an exceptionally painful contraction in gross metro production during the recession. Output fell 6 percent from peak to trough, but recovery from the new low has barely progressed, Brookings reported.
"This sluggishness and lack of resilience — as much to blame for the region’s poor performance over the recession as the initial contraction — raises serious questions about the fundamental orientation of Las Vegas’ present economy," the report said.
In summary, the Las Vegas metro area fell further and faster than almost any other market in the first few months of the recession.
"Given the highly cyclical nature of two of its core industries, gaming and tourism, such a violent swing may have been expected irrespective of housing market dynamics, as will be a partial snapback once the national economic recovery gains momentum," Brookings’ Mountain Monitor said.
Contact reporter Hubble Smith at email@example.com or 702-383-0491.