The Southern Nevada Index of Leading Economic Indicators remained essentially flat in August as none of the data series showed much movement up or down.
The index registered 125.34 in August, compared with 125.47 in the previous month and 125.91 in August 2009, the Center for Business and Economic Research reported Wednesday.
Half of the data series contributed positively to the index, led by commercial building permits and gallons of gasoline sold. Weighing heavily on the negative side were residential building permits and residential permit valuation.
The August index is down 0.54 percent from a year ago, which is the smallest annual percent change since December 2007, said Bob Potts, assistant director of the research center at the University of Nevada, Las Vegas.
“This trend is encouraging, but it is still too soon to draw any firm conclusions,” he said. “First the index must show sustained positive growth before we can expect the same with employment.”
Unemployment has climbed to 14.8 percent in Las Vegas from 13 percent a year ago and total employment has declined 2.3 percent to 791,500.
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. August’s index is based on June 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.
Clark County Tourism Index fell to 131.54 in June, compared with 135.49 a year ago. Gaming revenues were down 6.9 percent, while the hotel occupancy rate slipped 1.1 percentage points and passenger count at McCarran International Airport stayed about the same.
The index won’t improve until consumers work through their current financial adjustments and there is an increase in discretionary spending for travel and tourism, Potts said.
Similarly, the Clark County Business Activity Index and Construction Index declined to 155.09 and 58.84, respectively, in June.
“The best that can be said about the numbers is that the rate of decline is moderating,” John Restrepo of Restrepo Consulting Group said. “However, a moderating rate of decline is a lot different than recovery. The big question is whether we’ve reached some kind of floor or are there other potential shoes to drop.”
Jeff Thredgold, economic consultant for Nevada State Bank, noted that the direction of national economic growth during the past few quarters has declined from a solid 5 percent last year to an anemic 1.6 percent in the most recent quarter.
“It shows what can happen when the business sector and the consumer sector lose confidence in Washington,” Thredgold said. “Logic would suggest that the unprecedented amount of stimulus in the U.S. economy should be leading to much stronger growth and solid employment gains. Instead, people are scared. Uncertainty is sky-high.”
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