A looming recession and trade tensions between China and the U.S. are lowering business confidence in Southern Nevada, according to a recent report from UNLV’s Center for Business and Economic Research.
The Southern Nevada Business Confidence Index — which gauges business leaders’ expectations for the next quarter — dropped 14 percent between the second and third quarter of 2019. The index hit 120.7, its lowest level in three years.
According to a statement from CBER, local business leaders reported a negative view on the U.S. economic outlook for the first time in many years, while their confidence in the Nevada economy remained high. This suggests that local business leaders are worried about increasing trade tensions between the U.S. and China, according to CBER.
A survey from the National Federation of Independent Business found 30 percent of business owners have had their business impacted negatively by the changes in China trade policy.
The confidence index measures business leaders’ expectation of the general economic conditions in Nevada, sales, profits, hiring and capital expenditure. Business leaders’ expectations for the last four categories dropped this past quarter, with confidence in hiring hitting the lowest level in nearly six years.
“Economic uncertainty (is) an important challenge that local businesses face,” the CBER statement reads. The report also found that businesses’ continued challenge of finding qualified employees might have also played a role in the low hiring expectations.
Despite the drop, the Southern Nevada Business Confidence Index remains above 100, which means the respondents on average still have a positive outlook on the five components.