Southern Nevada’s economy shows no signs of improvement, leaving little doubt that the current downturn will continue through the first half of 2009, UNLV economist Keith Schwer said Tuesday.
Half of the 10 monthly data series contributed negatively to the Southern Nevada Index of Leading Indicators, which dropped to 130.44 in September from 133.46 in the same month a year ago.
The index is on a downward swing that started in the second half of 2007 and steepened amid the current chaotic financial convulsions, Schwer said.
"It’s a clear story," he said of the gloomy forecast. "That’s just what the numbers are telling you. It seems that is supported not only in that index, but also in national data. The national economy will continue to be in decline in the first half of 2009."
Gaming revenue decreased 15 percent in July, the month of data used for the September index, while passenger traffic at McCarran International Airport dropped 8.6 percent and visitor volume fell 4.6 percent.
The economic index, compiled by the Center for Business and Economic Research at University of Nevada, Las Vegas, is a six-month forecast from the month of the data, based on a net-weighted average of each series after adjustments for seasonal variation.
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.
Schwer noted that the stock market rebounded Tuesday, but indicators he tracks are generally down for the year.
Hotel occupancy rates have fallen below 90 percent and room rates have been reduced in an effort to "stem the tide," Schwer said. A topped-out consumer will likely cut spending on discretionary items such as travel, suggesting further weakness for Las Vegas, he said.
"Part of it is the national economy. The Treasury is working its way through a number of programs to put liquidity in the banks and clean up the housing problem," Schwer said. "The other thing is continuing to work with the international problem. It’s amazing interest rates in Iceland are now 18 percent. We’re so interested in economic activity in our own corner of the world, we forget we live in a global environment. That has an impact on us."
Consumers are looking for ways to save money, Ritzy Rags owner Pam Linder-Rothman said. Business isn’t what it used to be at her consignment boutique at 2550 S. Rainbow Blvd., but it’s still brisk, she said.
"I get a lot of show-business clients or real estate people who are not doing so well but still need to look good," she said. "They’re trendy, all unique pieces. Unfortunately, a lot of stuff comes from high-end stores that have closed. One of the new stores at the Forum Shops closed and I had half a million dollars of merchandise at 10 cents on the dollar."
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