Report says Las Vegas has world’s fifth-worst economy

You already know Las Vegas has one of the country’s worst economies.

Now, a new report takes things further.

The Brookings Institution, which is based in Washington but has a local research arm, said Tuesday that the Las Vegas Valley has the world’s fifth-worst economy. The think tank ranked the region No. 146 on its Global Metro Monitor, which rates the world’s 150 biggest metropolitan economies on their economic strength before, during and after the recession.

The report also included details on how to revive the local economy. Its conclusion? Restoring growth will require a little time, a more educated work force and a diverse jobs base.

To develop its analysis, researchers at Brookings considered each region’s overall gross value added, which measures the worth of goods and services produced in an area’s economy. It also weighed gross value added per capita and changes in employment and population. Because some statistics from 2008, 2009 and 2010 aren’t yet available, the group forecast some indicators to fill in the blanks.

In its final result, the Brookings report’s assessment of Las Vegas is less a measure of economic torpor than it is proof of just how volatile the city’s economy is, said Robert Lang, director of Brookings Mountain West at the University of Nevada, Las Vegas.

"Places like Buffalo (ranked No. 120) look fantastic because they didn’t boom or bust," Lang said. "What this shows is, given how high a flier we were, our conditions are dismal relative to that performance. Not only did we crash deeply, but we’re underperforming in the recovery."

Added Brian Gordon, a principal in local research and consulting firm Applied Analysis: "Where many of these markets didn’t experience such a run-up, Southern Nevada is being equally penalized on the downside of the cycle. It’s a sharp contrast from being one of the strongest and fastest-growing economies to one of the hardest-hit."

To understand the city’s big bust, look first at its expansion heyday from 1993 to 2007.

The population of Las Vegas burgeoned by 104 percent to nearly 2 million in that 14-year period, making the city first in the United States and third in the world for population gains. Employment grew 4.9 percent annually, driven by construction, real estate and gaming, and the market added roughly 470,000 housing units from 1990 to 2007. Brookings ranked Las Vegas No. 14 in the world for its overall economic performance in the period.

When the recession took hold of the economy in 2008, though, the trends reversed.

Local employment dropped 4.9 percent from 2008 to 2009, compared with 4 percent nationally. Much of the job loss came in the region’s most important industries: construction, which shed 28,000 jobs in the year, and leisure and hospitality, which cut 19,000 positions. Gross value added slumped even more, dropping 5.4 percent. That indicates the loss of high-value jobs in financial and business services, many of which supported real estate and tourism, the report said. And a region that added a net average of 40,000 residents a year in better times posted a net loss of 1,300 residents from 2008 to 2009.

In that slowest-growth period, Las Vegas ranked No. 128 worldwide.

At No. 146, the city’s situation is still worse in 2010, nearly 18 months after the recession’s June 2009 end. The valley’s gross value added per capita has continued to erode, dropping 1.2 percent even as the nation’s average improved. Employment dipped 3 percent, far more than the nation’s 0.7 percent employment falloff.

The only major cities performing worse overall than Las Vegas in 2009 and 2010 were Thessaloniki, Greece; Barcelona, Spain; Dubai, United Arab Emirates; and Dublin, Ireland. Greece, Spain and Ireland have all battled fiscal crises stemming in part from rich worker-benefits packages and early retirement ages. Dubai, whose Dubai World investment arm owns half of CityCenter, has struggled with poor real estate investments and a 2009 collapse in oil prices.

Observers blame the valley’s abysmal post-recession performance partly on the severity of the local housing crash and partly on the area’s lack of economic diversity.

The Brookings report singled out Southern Nevada’s high number of home foreclosures as a key obstacle to its recovery. The region had the nation’s second-highest share of bank-owned properties in June, reflecting the "inflated prices, easy credit and exotic mortgages that pervaded the housing market during the 2000s," the report said. Two-thirds or more of residential mortgage holders in Nevada owe more on their loans than their home is worth.

But the report gave just as much attention to the importance of diversifying the local economy. Between them, construction and consumer-oriented industries such as gaming accounted for 53 percent of the city’s 2007 output.

Lang pointed to the fact that the nation’s better-performing cities, including Austin, Texas (No. 26), Washington, D.C. (No. 37), Dallas (No. 71) and Seattle (No. 50), are "mostly educated metro areas" with varied, high-skill economies.

"Those places have much greater economic diversification and a lot of high-end, white-collar services or technology jobs. It’s a different mix of industries that has fared better," Lang said. "All our eggs were in the consumption basket. There was a collapse in consumption because if people didn’t lose their house, they lost the equity in it. The wealth effect is gone."

Turning the economy around will require boosting the city’s 22 percent college graduation rate, the Brookings report said. And city leaders should lasso the potential of existing research centers, including UNLV’s Solar Solutions and Advanced Clinical Training and Research centers.

Las Vegas already has several advantages it can leverage into improved diversity, Lang said.

Thanks to major construction projects such as CityCenter, Las Vegas has plenty of laborers schooled in large-scale building. That labor force could help the region attract massive green-energy projects. Plus, McCarran International Airport is adding several international gates in its Terminal 3, scheduled to open in June 2012. That development will bring in more customs workers trained in clearing goods and people through Las Vegas, and it will provide more direct access to fast-growing East Asian markets, Lang said.

The city’s housing price crash could pose benefits: Affordable real estate helped drive the city’s growth in the 1990s and early 2000s, Lang said, and cheaper prices could bring a similar effect in coming years.

"I can see the sunshine on the horizon, but at the moment, everybody’s going to over-read the negative news because they were over-reading the positive news for so long," he said.

Gordon agreed that Las Vegas could return to growth, but it’ll take a while, he said. First, the nation’s economy must improve, so that spending in the city’s economy can flourish again.

More importantly, the state’s leaders must work to persuade larger and more diverse companies to relocate to or open branch operations in Southern Nevada.

"It’s going to be a slow and painful process. It will require baby steps," Gordon said.

Contact reporter Jennifer Robison at or 702-380-4512.

Dan Barnson steps down
Arbor View football coach Dan Barnson stepped down Friday after 12 seasons at the helm. Under Barnson, the Aggies won 104 games and became one of the top programs in Las Vegas. The Aggies went 12-2 in 2018 and won a region championship for the first time in program history. Barnson loves Friday nights, but said the 12-month commitment was getting exhausting.
NFR 2018 Highlights
NFR 2018 highlights from every round of this years rodeo.
NFR 2018 Round 10 Highlights
NFR 2018 Round 10 Highlights of the 2018 Wrangler National Finals Rodeo from the Thomas & Mack in Las Vegas, Nevada. (CBS Sports Network/PRCA)
NFR- Joe Frost
NFR Bull Rider Joe Frost talks about the difference in bulls and his family legacy with Cassie Soto before the last round of the National Finals Rodeo.
Herm Edwards on LV Bowl loss
Arizona State coach Herm Edwards talks about the loss in the Las Vegas Bowl. Video by Mark Anderson/Las Vegas Review-Journal
Fresno State linebacker George Helmuth after LV Bowl
Linebacker George Helmuth talks about Fresno State's turnaround. Video by Mark Anderson/Las Vegas Review-Journal
Youth cancer survivor receives gift bat at Winter Meetings
Cancer survivor Steven Mondragon, baseball player at Los Altos High in Hacienda Heights, California, received a complimentary bamboo bat during the Baseball Winter Meetings in Las Vegas, Nevada, on Dec. 12, 2018. (Ron Kantowski/Las Vegas Review-Journal)
NFR Day 9 Highlights
Highlights from round 9 of the 2018 Wrangler National Finals Rodeo from the Thomas & Mack in Las Vegas, Nevada. (CBS Sports Network/PRCA)
NFR 2018- Will Lummus Leads in Steer Wrestling
As NFR 2018 enters day nine, steer wrestler Will Lummus continues to see his name at the top of the standings. Las Vegas Review Journal host Cassie Soto speaks with the Mississippi native about his excitement to be participating in his first ever NFR.
John Saccenti on the Las Vegas Bowl's future
Las Vegas Bowl executive director John Saccenti talks about the game's future. Video by Mark Anderson/Las Vegas Review-Journal
UNLV's Mbacke Diong on his offensive improvement
UNLV forward Mbacke Diong talks about his offensive improvement. Video by Mark Anderson/Las Vegas Review-Journal
NFR dirt is the most important part of the rodeo
NFR has bull riding, saddle bronc, barrel racing, tie down roping, steer wrestling, team roping, and bareback riding but one of the most important part of the rodeo according to construction maintenance manager Allen Rheinheimer is the dirt that they all take place in. Review-Journal sports writer Ed Graney chats with Rheinheimer and ground man John Jamison to get an inside look at the dirt in Thomas & Mack at the National Finals Rodeo.
North Las Vegas Pedestrian-cyclist Survey
North Las Vegas officials are seeking comments from residents in hopes of bettering their experience in the city. An online survey has been set up for citizens to share their opinions and give their suggestions.
NFR Day 8 Highlights
Highlights from round 8 of the 2018 Wrangler National Finals Rodeo from the Thomas & Mack in Las Vegas, Nevada. (CBS Sports Network/PRCA)
NFR - Wyatt Denny Talks About Representing Nevada
NFR Bareback Rider Wyatt Denny talks to host Cassie Soto about being the only Nevada representative in the NFR this year and his skiing talent.
Junior NFR Offers Breakaway Roping for Girls
Unlike the NFR at the Thomas and Mack Center, the Junior NFR at the Las Vegas Convention Center offers breakaway roping for girls 19-and under. This event allows the young women of rodeo one more event to participate in, aside from barrel racing.
North Las Vegas Pedestrian-Cyclist Survey
North Las Vegas officials are seeking comments from residents in hopes of bettering their experience in the city. An online survey has been set up for citizens to share their opinions and give their suggestions.
NFR Day 7 Highlights
Highlights from the 7th go-round of the 2018 National Finals Rodeo in Las Vegas on Tuesday, Dec. 12, 2018. (CBS Sports Network/PRCA)
NFR- Jessica Routier
NFR Barrel Racer Jessica Routier talks about being at her first NFR, her horses, and her family with Cassie Soto in front of Thomas & Mack before round 7 of the National Finals Rodeo.
The Nevada State Museum
The Nevada State Museum of Las Vegas, located at the Springs Preserve, covers all eras of the state, from prehistoric to today.
NFR Day 6 Highlights
Highlights from the 6th go-round of the 2018 National Finals Rodeo in Las Vegas on Tuesday, Dec. 11, 2018. (CBS Sports Network/PRCA)
Las Vegas Bowl Teams Talk Shop at Maverick Helicopters
Arizona State, Fresno State talk to the media at Maverick Helicopters.
NFR- Will Lowe
NFR Bareback Rider Will Lowe talks with Aaron Drawhorn about his 15 years at the NFR, starting to ride at age 7, and renewing his wedding vowels this year in Las Vegas before night 6 of the National Finals Rodeo.
Veterans Village
Veterans Village and Veterans Village II were created to assist homeless veterans get back on their feet. (Mat Luschek/Las Vegas Review-Journal)
Holiday party cocktails
Veterans Village II Unveils Model Container Home
Veteran's Village II unveiled a model container home. The organization will be building 10 of these container homes to house veterans of the village. Mat Luschek/Las Vegas Review-Journal
NFR Day 5 Highlights
NFR Day 5 Highlights
NFR- Kory Koontz
NFR Team Roper Kory Koontz talks about his years at the event since 1992, his dynamic with a 23 year old partner Dustin Egusquiza, and how he contines to perform with diabetes with Aaron Drawhorn outside of Thomas & Mack before round 5 of the National Rodeo Finals.
Meet the woman behind the Las Vegas Bowl
Melissa Meacham-Grossman is the associate executive director for the Las Vegas Bowl. (Jason Bracelin/Las Vegas Review-Journal)
NFR Highlights Day 4
NFR highlights day 4
Tony Sanchez wraps up the UNLV season
UNLV football coach Tony Sanchez wraps up the season. Video by Mark Anderson/Las Vegas Review-Journal
The Mansion at MGM boasts hidden luxury
The Mansion at MGM, a hotel within a hotel, features 29 luxury villas for invited guests only. (K.M. Cannon/Las Vegas Review-Journal)
Goodwill of Southern Nevada
Under CEO John Helderman, Goodwill of Southern Nevada has expanded its services including the new home of Goodwill’s Veteran Integration Program. Free job services are paid for by revenues generated by Goodwill's retail stores. In 2017, the sale of donated goods allowed Goodwill of Southern Nevada to train more than 17,000 job seekers. More than 2,500 of those found local jobs. (Las Vegas Review-Journal)
Little bat company on verge of MLB deal
Larry Thein, part owner and one of only three employees of the Tat2 Bat Company of Davenport, Iowa, made the company's first bat in a hog barn. He spoke of the humble origins during a trade show at the Baseball Winter Meetings in Las Vegas, Nev., on Dec. 12, 2018. (Ron Kantowski/Las Vegas Review-Journal)
Texas Roadhouse opens in North Las Vegas
Texas Roadhouse has opened at on Craig Road at Bruce Street in North Las Vegas as part of an emerging "restaurant row." (K.M. Cannon/Las Vegas Review-Journal)
Holiday Parade Lights Up Downtown Summerlin
Holiday parade lights up Downtown Summerlin every Friday and Saturday night through Dec. 22.
Nevada's solar industry on the rebound
In 2015, the Nevada Public Utilities Commission voted in favor of a new tariff structure that reduced net energy metering buyback rates and increased fix fees for residential solar customers.
Apartment complexes selling fast in Las Vegas
Las Vegas’ apartment vacancy rate is among the smallest in the country, and rents are climbing faster than the national average. (LVRJ)
Aristocrat Opens $45M Campus In Summerlin
Aristocrat Technologies Chairman Ian Blackburne discusses the company's growth. (LVRJ)
Sunrise Hospital celebrates 60 years
Sunrise Hospital opened its doors to patients on Dec. 15, 1958. Employees of more than 35 years celebrated at a luncheon Wednesday, Dec. 12, 2018. Jessie Bekker/ Las Vegas Review-Journal.
Maya Cinemas to open soon in North Las Vegas
Moctesuma Esparza, CEO of Maya Cinemas, talks about the newest location in North Las Vegas, set to open Jan. 10. The aim of the theatre chain is to serve latino-centric, underserved communities.
Holiday shopping and returns make this the busiest time of year for UPS
The UPS Las Vegas South facility is the company's busiest pre-load operation in the country, and it's even busier this time of year. (K.M. Cannon/Las Vegas Review-Journal)
Primm’s outlet mall has fallen on hard times
The mall, attached to Primm Valley Resort, opened in 1998. Back then, it was a “textbook, perfect outlet-center location." But now, Primm’s outlet mall has fallen on hard times. Las Vegas Boulevard has endless shopping spots. And there are other outlet malls that don’t require a hefty drive to the state line. Its mortgage-holder foreclosed on the mall in late September.
Miltary auction at Ritchie Bros. Auctioneers
Humvees, ammo cans, construction equipment, field gear and more is on the auction block Friday and Saturday at Ritchie Bros. Auctioneers. About 10,000 items in all are for sale in what GovPlanet bills as the largest auction of its kind.
Las Vegas residents discuss avoiding holiday scams
Las Vegas residents discuss their donation habits and how they avoid giving money to scam charities during the holiday season. (Bailey Schulz/Las Vegas Review-Journal)
Tesla’s Nevada Gigafactory ahead of economic impact expectations
The Tesla Gigafactory’s economic impact on Nevada has exceeded projections, bringing in more than 7,000 jobs. In 2014, Nevada agreed to give the automotive and energy company $1.3 billion in tax abatements. In return, Tesla promised to meet certain requirements in areas like employment and capital investment. As of June, Tesla has brought in a total of $6.05 billion in capital investment, surpassing the $4.95 billion projection. The original contract gave the company until 2024 to make $3.5 billion in capital investments in Nevada. Derek Armstrong, deputy director of the Governor’s Office of Economic Development.
Land sales near the Las Vegas Raiders stadium
Land around the Las Vegas stadium site has been selling for high prices. A few months before the stadium’s groundbreaking, Global Trust Group acquired a 2.5-acre parcel just north of the stadium site. The property sold for $7.25 million, or $2.9 million an acre. Osprey Real Estate Capital and Huntington Hotel Group acquired a 2-acre industrial site just west of the stadium site in late November. The property sold for $6.5 million, or $3.15 million per acre. That's roughly 12 times the average price of land in the valley this year as tracked by Colliers International.
T-Mobile Tech Experience Truck parks in Toshiba Plaza at T-Mobile Arena
The Tech Experience Truck is a state-of-the-art showroom on wheels, with demonstrations that put connected drones, smart cities, augmented/virtual reality and smart tracking. The exhibit shows new wireless technology – including 5G and the Internet of Things (IoT). (K.M. Cannon/Las Vegas Review-Journal)
Steve Siegel, CEO of the Siegel Group, speaks about helping families and other needy residents
Steve Siegel, CEO of the Siegel Group, speaks about helping families and other needy residents to keep them from teetering off into homelessness. Bizuayehu Tesfaye/Las Vrgas Review-Journal @bizutesfaye
Crowds camp out for Chick-fil-A opening
Dozens of customers camped out 24 hours ahead of the 6 a.m. Thursday opening of the new Chick-fil-A on Rainbow Blvd.
Cheapest listings for sale in Las Vegas
Listed for $39,990, 585 S. Royal Crest Circle, Unit #9 is one of the cheapest homes currently listed for sale in Las Vegas. (Caroline Brehman/Las Vegas Review-Journal)
MGM's sports betting deals
MGM Resorts International signed a sports betting sponsorship agreement with the NBA in July It was the first professional sports league to have official ties with a legal sports betting house. The deal came just two months after the U.S. Supreme Court overturned a law prohibiting sports betting in most states. In October, MGM became the first gaming company to sign a sports betting partnership with the NHL. In November, MGM became the first gaming company to sign a sports betting partnership with the MLB. Financial terms of Tuesday’s deal and earlier partnerships have not been announced.
Terry Miller discusses Convention Center
Project Manager Terry Miller explains the phases of Convention Center construction.
Zappos treats their team members on Cyber Monday
Zappos rolls out a variety of food, drinks and special activities for all team members at their downtown Las Vegas headquarters for Cyber Monday. (K.M. Cannon/Las Vegas Review-Journal)
Team Hybrid at the 2019-Model Motor Trend International Auto Show
Among the companies showing off the 2019 model cars, Team Hybrid shows off its modified cars. Las Vegas resident David David talks about the team, which is in its ninth year exhibiting at the show, and his show car.
Black Friday Shoppers at downtown Summerlin and at the Arsenal
Black Friday shoppers at downtown Summerlin and at the Arsenal. Bizuayehu Tesfaye/Las Vegas Review-Journal @bizutesfYe
Black Friday shopping in Las Vegas
Black Friday sale shopers express their shopping experience. Bizuayehu Tesfaye/Las Vegas Review-Journal @bizutesfaye
Las Vegas Livestock recycling Strip food waste
Las Vegas Livestock collects and recycles food from many Las Vegas Strip companies. (Nicole Raz/Las Vegas Review-Journal)
Black Friday at Fry's
Shoppers line up for deals early on Black Friday at Fry's Electronics on Las Vegas Boulevard South. (Mat Luschek/Las Vegas Review-Journal)
Black Friday shoppers at Best Buy at 5 am
Black Friday shoppers at Best Buy at 5 am on Nov. 23. (Mat Luschek/Las Vegas Review-Journal
Black Friday - 1am Closing Time
Quiet night.
News Headlines
Local Spotlight
Home Front Page Footer Listing
You May Like

You May Like