LAS VEGAS - December 16, 2009 - An economic rebound for Southern Nevada is expected to pick up near the end of 2010, economists for the Center for Business and Economic Research at UNLV reported Wednesday. At its semi-annual conference, economists predicted the Southern Nevada economy to continue downsizing in hotel, gaming and construction industries in 2010 with job losses spreading to retail and wholesale trades.
"In 2011, we expect improvements in employment growth, personal income and tourism, gaming revenues and taxable sales and that should help the state," said Mary Riddel, interim director for the Center for Business & Economic Research. "That said, economic activity declined substantially in 2008 and 2009, so this uptick will not mean we're returning to 2007 levels of economic activity."
A modest improvement is expected in visitor volume, due in part to new properties like CityCenter opening. However, Riddel cautioned that more visitors do not equal an increase in gaming revenue. Personal income is low and local hotels will continue to cut back on room rates to attract more budget-minded travelers who usually spend less at gaming tables and retail stores. It is likely gaming revenue will fall short in 2010.
Among the economists' findings/predictions:
o Economic activity in Southern Nevada is at its lowest in 80 years and visitor volume is 2.1 percent below 2008 levels. Gaming revenue is at its lowest since the mid 1990s. Employment growth stopped in February of 2008.
o Demand for rooms will not increase by much, but a deep discounting of room rates will help bring in visitors at the end of 2010. CityCenter bookings may come at cost to other properties.
o Low residential permitting activity coupled with a strained job market will cause the Las Vegas population to level off close to two million.
o No economic sector is immune to the recession. Further job losses in construction, leisure and hospitality will occur. Retail trade will be disproportionally hit.
Risk Factors to the Forecast:
o The CBER bases its forecast on low inflation rates in the U.S. and globally. Uncertainty of U.S. and international government deficits and recoveries, conflicts in the Middle East and possible higher oil prices may lead to inflation.
o A federal stimulus package has been beneficial but it is possible the national economy may downsize once the stimulus dollars are spent.
o Impact of CityCenter remains to be seen. It may stimulate new demand for rooms and increase gaming revenue or increased competition may force other properties to lay off works and close sections of the hotels.
The CBER report again stressed the importance of economic diversification, by capitalizing on Las Vegas's natural resources - sunlight and windpower - as ways to bring in jobs in renewable energy and sustainability.
The CBER conference, held twice a year, forecasts economic trends for the U.S. and Southern Nevada. CBER staff gathers data from state employment, gaming and tourism agencies to analyze local and national economic trends.
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Mary Riddel's comments on the economic outlook: .
