December 13, 2011--Southern Nevada's economy has begun a slow and long-awaited recovery and will continue to see improvement over 2012 and 2013, UNLV economists at the Center for Business & Economic Research (CBER) reported Tuesday during a biannual economic outlook conference.
As the U.S. and western states' economies improve, they will continue to stimulate local tourism, according to the economists' assessment of national and regional economic trends. Las Vegas experienced 19 consecutive months of increased tourism, as of September 2011, and the region is returning to prerecession levels. Nevada's general economic conditions also are on the up swing, with moderate gains projected in 2012 for personal income, gross gaming revenue, employment and population.
"The U.S. economy is accelerating and that is going to contribute to improving growth for Southern Nevada," said CBER Director Stephen Brown. "We are seeing improvement pretty much across the board, in nearly every industry except for construction and real estate. Even business confidence is up."
Businesses throughout Southern Nevada are increasingly optimistic, according to CBER's quarterly Southern Nevada Business Confidence Outlook, a survey of local business which also was released Tuesday. Firms are more likely to hire and make capital expenditures in the first quarter of 2012 than in recent years, the survey concluded.
While gaming, tourism and hospitality industries will play a key role in the recovery process, industry diversification will be one of the keys to improvement, Brown added.
"The current weaknesses will provide an opportunity for future diversification by freeing up resources for use in other sectors," Brown said.
Several budding industries have the potential to develop economic clusters in Southern Nevada including: solar energy, water research, high-tech services, medicine, wholesale merchandising and transportation.
Economists warned that Southern Nevada should not look to real estate for its economic growth in the coming years. With the decline in housing prices, 63.3 percent of homeowners in the Las Vegas area have negative equity. The market will eventually recover, but not in 2012, economists predict. Residential sales have already begun rising, but the real estate market has a substantial overhang of residential and commercial property.
Economists also found:
- Employment will slightly increase in 2012. In 2011, jobs in Clark County increased by 9,000 and unemployment improved slightly from 14.8 percent in 2010 to 13.2 percent in 2011. Similar gains are expected in the coming year.
- Wages will rise slightly. Since 2008, Nevada wages have continued to slip downward while those in the rest of the country have resumed rising. In Nevada, higher paying jobs continue to be eliminated in favor of lower paying jobs. This is the first year that employees in many industries could see a moderate increase.
- Fewer Nevada businesses are seeking credit. Of those seeking credit, fewer are finding their credit needs satisfied.
- In 2012, the Southern Nevada region is projected to grow by 50,000 residents or 2.5 percent. During the next several decades, economists predict that affordable housing will once again make Clark County attractive. The Las Vegas population is expected to reach 3.6 million by 2050.
The CBER conference, held twice a year, forecasts economic trends for the U.S. and Southern Nevada. Data is compiled from state employment, gaming and tourism agencies to analyze local and national economic trends.
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