The local economy will shed nearly 4 percent of its work force in 2009, a nationwide group of public officials predicts.
A new study conducted by Massachusetts-based IHS Global Insight for the U.S. Conference of Mayors found that employers in Las Vegas will cut 35,700 jobs in 2009, or 3.9 percent of the city’s 912,700-worker labor force. The study ranks Las Vegas No. 15 in the country for projected job loss in 2009.
Los Angeles ranked No. 2, with its 5.5 million-worker labor force poised to lose 164,100 jobs, or 3 percent of its employment base. New York was No. 1, with a projected 2.1 percent decline in jobs, or 180,800 posts out of 8.6 million.
Local job loss will center on the construction and tourism sectors, said Jim Diffley, managing director of IHS Global Insight’s regional services division. Beyond those two pillars of the economy, broad losses should visit most industries and fields, because scarce credit will hamper growth, Diffley said.
If Las Vegas lost 3.9 percent of its current jobs base, the city’s unemployment rate would jump to around 11.5 percent, said Jeremy Aguero, a principal in local research firm Applied Analysis.
That would be a substantial increase over December’s 9.1 percent jobless level. It also closely matches the statewide peak unemployment rate of 11.4 percent that Nevada economists predicted when they testified Wednesday before a state legislative budget subcommittee.
A local jobless rate approaching 12 percent is "not out of the realm of possibility," Aguero said, but that rate rests at the upper edge of models Applied Analysis has crafted. Aguero said he believes Las Vegas will fare a little better than the mayors’ association expects.
His statistics show that the local market could indeed drop roughly 40,000 jobs in 2009, but new projects such as CityCenter, scheduled to open in late 2009 with 12,000 employees, and M Resort, set to launch in March with 1,800 workers, should offset some losses.
Aguero said he expects the city’s jobs base to stay flat or to contract perhaps 1 percent. Applied Analysis predicts the unemployment rate will hover in the mid-9 percent range for most of 2009 and crest at more than 10 percent in early 2010.
Economist Keith Schwer, director of the Center for Business and Economic Research at the University of Nevada, Las Vegas, also said it’s unlikely the jobless rate here will surge past 11 percent, though he added that such a gain is possible. Like Aguero, he said unemployment in Nevada and Las Vegas should max out at more than 10 percent.
It’s unusual for Las Vegas to lose jobs, even during a national recession. For most of the last two decades, Las Vegas eked out at least meager job formation even amid widespread economic decline.
But with the current downturn’s origins in housing and construction — Southern Nevada’s second-biggest employment sector after tourism and hospitality — there was no dodging this downturn, Diffley said.
The mayors’ conference called for federal stimulus spending on infrastructure projects to avert job losses.
Schwer said investing in infrastructure would help only if projects are temporary, targeted and timely — that is, they don’t last very long, they provide jobs for people who are already unemployed and they’ll break ground in 2009.
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