LV economy suffers through summer
A drop in taxable sales dragged the Southern Nevada Index of Leading Economic Indicators down to 125.47 in July, a substantial decrease from 126.11 the previous month, a UNLV economist said.
Other data series contributing negatively to the index were residential and commercial building permits, McCarran International Airport passenger counts and gross gaming revenue. Visitor volume, convention attendance and gasoline sales pushed the index up.
"This up-and-down trend is going to continue," Constant Tra, associate director of the Center for Business and Economic Research at University of Nevada, Las Vegas, said Monday. "I think in the next six months, we'll see the data go up and down, no gain. The best we can do is stay at the level we're at."
Taxable sales fell 6.5 percent to $2.34 million in May, the month of data used for the July index.
Current spending patterns indicate weak job growth for the next four to six months. Total employment has declined 2.9 percent from a year ago to 800,100 and the unemployment rate has increased to 14.5 percent, compared with 12.4 percent a year ago.
Visitor volume was up about 2 percent in May, though more visitors are driving in from Southern California and fewer are flying in from long-haul destinations.
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. July's index is based on May data.
The accompanying 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.
Some economists are predicting a "double-dip" recession amidst reports of higher unemployment claims, weaker retail sales and a struggling housing market.
"I don't see a double dip per se, but in this jobless recovery, in a market that was overleveraged, we're still somewhat in search of a floor, and you can't dance without a floor," said Dave Lazzarini, manager of Barcelone shopping center in Las Vegas. "It will be a long, slow climb back. The question is where will the demand and where will the jobs come from?"
The Clark County Business Activity Index declined nearly 4 percent from a year ago, suggesting that overall business activity has yet to fully stabilize, said Bob Potts, assistant director of the UNLV research center.
The steepest slide came in the construction index, which tumbled 22.7 percent from a year ago, largely a reflection of 16,400 lost construction jobs. The industry has lost 57 percent of its work force, or 63,500 jobs, since June 2006.
The Clark County Tourism Index posted a 2.51 percent decline on a seasonally adjusted basis, with airline passengers, gaming revenue and hotel occupancy all contributing to the decline.
The good news is Las Vegas can build on the strong export prowess that gaming companies demonstrated before the crash, said Mark Muro, policy director at Washington, D.C.-based Brookings Institution.
"Doubling exports in the next five years can provide thousands of jobs to Las Vegas residents," he said. "In that sense, exporting could represent one element of a rebuilt Las Vegas economy, perhaps in tandem with an expanded green or alternative energy economy and more emphasis on technology and health."
Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.
Former Fed economist takes UNLV post
The University of Nevada, Las Vegas has hired former Fed economist Stephen Brown to be executive director of the Center for Business and Economic Research, Associate Director Constant Tra said.
Brown, who starts Sept. 1, recently retired as director of energy economics for the Federal Reserve Bank in Dallas, where he was widely recognized for his knowledge of world energy markets and the effects of energy price shocks on economic activity.
Brown replaces Keith Schwer who held the position from 1986 until his death in December and is largely credited with making the research center a primary source of local economic analysis. He developed the monthly Southern Nevada Index of Leading Economic Indicators.
UNLV economics professor Mary Riddel was named interim director of the research center, but passed on the permanent position to take a sabbatical leave.
Brown holds a bachelor's degree in economics from California Polytechnic State University, and a master's and doctorate in economics from the University of Maryland.
He is an associate editor for the journal Energy Economics and previously served as editor for the Dallas Fed's publications, Southwest Economy and Economic and Financial Policy Review. He also taught at Southern Methodist University and Tulane University.
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