Local economic index increases in May

The Southern Nevada Index of Leading Economic Indicators rose to 123.38 in May, a sign that employment could be improving later this year, a UNLV economic analyst said Friday.

The index grew by 0.52 percent from the previous month, primarily from gains in visitor volume, airline passenger counts and taxable sales. It's down from 125.91 in the same month a year ago.

Other components of the index contributed little or had a negative influence on the series.

The index has bounced up and down over the last two years after topping 130 from 2006 to 2008.

"There's no clear signal yet," said Bob Potts, assistant director of the Center for Business and Economic Research at the University of Nevada, Las Vegas. "You need three months in the same direction before you can get comfortable in calling it a cycle. We had a good month."

The three series that contributed the most to the index were taxable sales, up nearly 26 percent in March to $2.74 billion; McCarran International Airport passengers, up 22.3 percent to 3.56 million; and visitor volume, up 18.1 percent to 3.41 million.

"We are an economy that depends on discretionary income of tourists," Potts said. "If the economies of the Western states improve, spending on travel and tourism could continue contributing to the economic growth in Southern Nevada."

The Clark County Business Activity Index provided another positive signal about the overall performance of the Las Vegas economy, he said. It now stands at 160.34 on a seasonally-adjusted basis, the highest level it's been in nearly two years. Taxable sales was the primary driver.

The Clark County Tourism Index also posted solid growth in March, increasing 2.7 percent from the previous month and 4.6 percent from a year ago. Gaming revenue grew 7.2 percent and hotel occupancy rose by 5.8 percent.

"If you look at all the numbers, travel and tourism are the best," Potts said. "They're actually raising room rates some, but there's so much uncertainty out there. Everybody's kind of in the same boat. They're going to have to buckle down and ride it out."

The Clark County Construction Index finally showed upward movement. The five-month moving average now stands at 49.91 and appears to be stabilizing after falling from 55.66 a year ago.

Commercial building permits more than doubled from a year ago to 31 and the value of those permits was more than 10 times a year ago at $30.1 million, yet they contributed absolutely nothing to the index because the numbers were so small a year ago, Potts noted.

The economic index, compiled by the Center for Business and Economic Research 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. May's index is based on March data.

CBER will present its Midyear Economic Outlook June 20 in the Venetian's Palazzo Ballroom. Register online at www.cber.unlv.edu/outlook/outlookregistration.

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