Economists and employment consultants are predicting a soft year ahead for hiring in Las Vegas and Nevada, as sustained lethargy in the housing market combines with slow growth in the resort sector to cap expansion ambitions among area businesses.
Researchers at the University of Nevada, Las Vegas’ Center for Business and Economic Research are forecasting 2.1 percent job growth for Southern Nevada in 2008, while analysts at the state’s Department of Employment, Training and Rehabilitation said they expect job formation to clock in at 1.9 percent statewide next year.
Those numbers are well below the state’s 5 percent and 6 percent job-growth rates of 2005 and 2006, but they’re an improvement on the 1 percent pace of recent months.
The employment department isn’t expecting a dramatic turnaround in job growth because economists there predict new jobs in residential construction will be hard to come by for much of 2008.
“The big key is still the pace of the housing recovery,” said Jim Shabi, an economist for the agency. “We’re still seeing negative growth in construction, and we’ll see that until the housing turnaround hits full speed.”
The credit crunch that accompanied the slackened housing market could also hinder business expansion in 2008, as companies find commercial loans harder to come by, said Keith Schwer, director of the Center for Business and Economic Research. Plus, consumers could spend less on local goods and services due to flagging home equity and higher interest rates on credit cards and other loans.
And the hotel-casino segment won’t contribute substantial numbers of jobs to the local economy before 2009, Shabi added. The Palazzo will open later this month with about 4,000 employees, and Aliante Station should bring an addition 2,000 jobs to the city in 2008, but some of those positions will be replacing the thousands of jobs lost when older casinos such as the Stardust and the New Frontier closed to make way for growth.
“Two forces hit us hard at the same time,” Shabi said. “One was the housing slump, and then some losses in the gaming industry. The national economy slowed down as well.
“The business cycle has not been rescinded yet, and we’re at the low point of that cycle right now.”
At least one local employment consultant believes the second half of 2008 should bring stronger job growth, though.
Andy Katz, president of Manpower of Southern Nevada, believes the 6,000 or so new jobs generated in the Las Vegas Valley’s gaming industry in 2008 will yield greater demand for the ancillary companies that provide vendor services and products to hotel-casinos.
Katz is even predicting the beginnings of a labor shortage by late 2008.
Manpower’s Employment Outlook Survey for the first quarter show that 72 percent of companies interviewed said they’ll maintain current staff levels, while 14 percent plan to hire more workers. Another 14 percent expect to pare work forces.
Planned job formation is down from the fourth quarter, when 18 percent of businesses surveyed said they’d increase staff numbers.
Some fields are positioned for more job growth than other industries will enjoy.
Statewide, the employment department anticipates the biggest job gains will be in education and health care. Those segments will experience a job-growth rate of nearly 4 percent, Shabi said. That’s because the state’s population has continued to grow, and schools, universities and hospitals are trying to keep pace with the needs of new residents, he said. Construction, on the other hand, will probably perform especially poorly for much of 2008, he said.
Katz foresees noticeable improvements in job numbers among retailers, call-center operators and other customer-service businesses.
Several national growth industries hold promise for job creation in Nevada, said John Challenger, chief executive officer of Chicago placement consultant Challenger, Gray & Christmas.
Energy offers expansion opportunities in a wide range of subspecialties, including oil and natural-gas development, nuclear power and alternative energies such as biofuels and wind, solar and geothermal power. Nevada’s abundance of the latter three elements could attract capital investment, making alternative energy a “strong driver” in the Silver State’s economy in 2008 and beyond, Challenger said.
“The demand for new sources of energy will create new ventures,” he said. “It’s a hot area, and one of those areas that could show significant offsetting effects to the housing crisis.”
Health care should also propel job growth nationally and locally, Challenger said. Traditional operations such as hospitals, doctors’ offices, physical-therapy practices and pharmacies will add considerable numbers of positions, he said, and the newer arena of biotechnology should also provide a steady stream of new employment.
Finally, Challenger is expecting significant new jobs among American companies that do business globally. International markets are expanding briskly, and a weak dollar means more firms from abroad will seek out opportunities in the United States. The result: Burgeoning demand for positions including translators and business-culture experts.
Still, the broader national job scene should barely creep along in 2008, Challenger said.
“Consumer confidence and purchasing power are sluggish, and the high price of energy is making it more difficult for people to fill their gas tanks and get to work,” he said. “We’ve got a housing crisis that’s not resolved yet, so all of that suggests slower growth in 2008.”
Small businesses with fewer than 100 employees will also feel the effects of a torpid national economy, said Michael Alter, president of SurePayroll, an Illinois paycheck-cutting service that surveys more than 16,000 smaller operations monthly to gauge their hiring trends.
But Alter is projecting an above-par performance for small businesses in Nevada. Job growth at smaller enterprises has been slightly better than state job-formation averages: Nevada’s job creation was 0.9 percent year-over-year in October, while Nevada companies with 100 or fewer workers added 1.5 percent to their staff counts in roughly the same time period, SurePayroll’s numbers showed.
The nation’s economy grew its overall job base by 1.2 percent in October.
“I expect Nevada’s small businesses will continue to grow above the national average,” Alter said.
“There’s a broader economic base, and there are broader growth opportunities in the industries that predominate in Nevada. I just see that there will be more and more jobs in Nevada.”
Contact reporter Jennifer Robison at email@example.com or (702) 380-4512.