For years, Henderson has been known as a bedroom community in Southern Nevada, a residential suburb with an easy commute to jobs in Las Vegas.
Local economist John Restrepo said that is no longer the case.
“We’re becoming more of an employment center,” Restrepo said, pointing to under-construction developments like the Google data center and the Raiders’ practice facility. “We’re an active, vibrant economic sector of Las Vegas’ overall economy.”
Restrepo, with RGC Economics, and Mike PeQueen, managing director of HighTower Advisors, discussed the economic standing of Henderson and the country at the Henderson Chamber of Commerce’s InSight 2019 event Wednesday evening. While the two voiced concerns that the economy may be slowing, both were optimistic for Henderson’s economic future.
‘A lot going on’
Henderson accounted for about 11 percent of all of the jobs in the Las Vegas Valley in 2018, according to labor market analytics company Emsi.
While Henderson’s job market and population are on the rise, the job market is growing faster. Restrepo expects it will grow 19 percent between 2018 and 2028, while the population is expected to grow 13 percent.
And Henderson’s workforce tends to be well-off; the average earnings for a worker in Henderson in 2018 were $58,888, compared to $56,958 for the average worker in the Las Vegas metropolitan statistical area, according to Emsi.
As for housing, Henderson accounted for 23 percent of the valley’s annual new home sales in December 2018. In December 2005, it was only 11 percent, according to local real estate consultant agency Home Builders Research.
Restrepo said these numbers reflect Henderson’s growing popularity.
“Having a growing job base here helps drive it to no longer be a bedroom community,” he said. “It’s a good location, and it’s got a lot of good employment centers.”
Dependence on China
While Henderson’s economy has been going strong, both PeQueen and Restrepo said there are risks to its growth.
The U.S. trade war with China and the country’s slowing growth could hit the valley hard, according to PeQueen.
Three of the valley’s largest employers — MGM Resorts International, Wynn Las Vegas and Las Vegas Sands Corp. — receive a large portion of their profits in Macau, a Chinese gaming enclave.
But China’s GDP is slowing, with growth at 6.6 percent in 2018, compared with 10.6 percent in 2010, according to the National Bureau of Statistics of China.
“Unlike most other cities of our size, we are far more dependent on global situations,” PeQueen said. “We care about China as a city because our employers make a lot of money there, and we need them to be financially stable so they can reinvest in this community.”
Additionally, median home sales in the U.S. are starting to weaken — a potential early warning sign that the economy could be slowing, PeQueen said.
The economy is “slowing, but still growing,” PeQueen said. “It doesn’t have to end.”
The next downturn
PeQueen said that because the economy is cyclical, it’s only a matter of time until the next downturn.
But it’s unlikely to be as deep as the last recession.
PeQueen said there are signs that the next downturn could be a “soft landing,” with the economy shifting from growth to slow growth and potentially going flat but altogether avoiding a recession.
“It’s a little too early to tell,” PeQueen said. “If we have that, that’s a wonderful thing. You basically get a free pass on recession for several years.”
Overall, PeQueen said that while economic growth is slowing in the U.S. and across the globe, it’s unlikely a recession will hit this year. Restrepo agreed.
“We’re going to see a slow but steady rate of growth through 2020 in Henderson, both in population and in jobs,” Restrepo said.