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Gaming Guru

Hubble Smith
 

Economy: Las Vegas Goes Against National Trend

15 March 2004

The Southern Nevada Index of Leading Economic Indicators moved modestly upward in February, rising to 130.28 as nine of the 10 series of data showed gains from a year ago.

The index, compiled by the Center for Business and Economic Research at University of Nevada, Las Vegas, is up slightly from January and matches its peak reached in September.

The accompanying Review-Journal chart includes several of the index's categories, along with data such as new residents and employment and housing numbers, updated for the most recent month for which figures are available.

Permit activity, an indicator of future construction expenditures, remains robust, up 38 percent on the residential side from a year ago and 63 percent on the commercial side.

"The construction sector is really big, propelled by low interest rates," Keith Schwer, director of the center, said Friday. "The market is red-hot. It won't stay that way. I mean, it'll be good this year again. One begins to worry if things gets so strong, speculation problems might arise."

Commercial building permit valuation totaled $196.5 million in December, the month of the data, a 432 percent increase from a year ago. Residential valuation grew 32.4 percent to $390.4 million.

John Restrepo, principal for Restrepo Consulting Group, an economic research firm in Las Vegas, said large swings in construction valuation can be deceptive.

"That could be one big project," he said. "If it's spread over 30 projects, then it means something."

Employment grew 4.7 percent in January to 881,600, and economists are projecting 2 percent to 4 percent growth for the year.

"Overall, we're one of the few metro areas not experiencing a jobless recovery," Restrepo said. "Some of those are service jobs, but in Las Vegas, they're pretty good jobs. Tourist industries in other cities don't pay as well as they do here."

Clark County gaming revenue, the heaviest-weighted contribution to the index, was off by 1.1 percent in December, but rebounded in January with a 6.3 percent increase.

"All in all, the index continues its upward trend," Schwer said. "The index is continuing to signal economic expansion in the months ahead."

Building permits, a 9.7 percent increase in taxable sales and continued growth in visitor volume and airport passengers compensated for sluggish gaming revenue.

The Conference Board, which measures consumer confidence, reported that the Rocky Mountain region scored the biggest gains last year, registering solid increases in help-wanted job advertising in key cities.

Las Vegas and Phoenix, both in the Rocky Mountain region, were two of the top three metropolitan areas in the country in adding jobs the past year.

"Nothing is more important to consumers than the health of the job market," said Ken Goldstein, economist for the board. "So it shouldn't be any surprise that consumer attitudes in this part of the country have turned more positive over the last 12 months than elsewhere."