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Gaming Guru

Ed Vogel
 

Nevada Economy Recovering

2 October 2003

CARSON CITY -- Nevada's economy showed continued signs of recovery in July as businesses posted their strongest sales increases since before the Sept. 11, 2001, terrorist attacks, state officials said Wednesday.

Sales by businesses in the state climbed by 9.3 percent in July, the largest monthly gain in nearly two years. Clark County business sales jumped even higher, up 10.6 percent.

During July, businesses in the state sold taxable goods valued at $2.95 billion, up $250 million over July 2002. In Clark County, businesses sold goods worth $2.13 billion, up $204 million over the same month in 2002.

The positive gains follow the announcement last month by the Department of Employment, Training and Rehabilitation that Nevada businesses added 11,000 jobs in August and unemployment dropped to 5.2 percent.

"It was a good month, although we still are comparing it with a weak month last year," state Budget Director Perry Comeaux said. "Nevada historically is one of the last states to go into the tank and one of the first to come out of a recession."

State Taxation Director Chuck Chinnock said sales tax collections in July were nearly $213 million, or more than 10 percent higher than last year. That rate nearly doubled projections made during the legislative session.

"While this single month of the new fiscal year exceeds normal growth expectations, it is too early to predict what the remainder of the fiscal year will bring," Gov. Kenny Guinn said. "Indications are that Nevada is slowly recuperating from the impacts caused by the war in Iraq and the slow economy of the last few years."

The only sour economic indicator for Nevada in recent weeks has been the monthly gaming tax report. Gaming revenue increased by 2.63 percent in July.

Comeaux would not say categorically that the gaming tax increases may be lower than the sales tax increase because of the growth of Indian gaming in California.

"I can't tell you Indian gaming doesn't have to do with the lower gaming rates," Comeaux said. "The conventional thinking is it will have more of an impact in Reno than Las Vegas."

Generally, sales by eating and drinking establishments reflect gaming tourism. In Washoe County, those sales increased by only 0.2 percent.

July was the first full month after the opening of the Station Casinos-run Thunder Valley Indian casino near Sacramento, Calif.

Sales at Clark County eating and drinking establishments climbed by 12 percent in July, compared with a year ago.

Mary Lau, executive director of the Retail Association of Nevada, said businesses in the Silver State are doing better than in almost every other state. Nevada's growth has been discussed in national retail association meetings, she said.

"For some reason, Nevada is trending higher than other states," Lau said. "Nevada is doing great. I don't know why people are buying. It may be they held off making purchases in the past."

Increases were reported in July in almost every buying sector. Automotive sales increased by 14.5 percent, building material sales were up 9.7 percent and general merchandise store sales increased by 8.3 percent. Sales at apparel stores were up 10.3 percent.

Despite the statewide overall gains, five rural counties still posted declines from last year, including in Pershing County where sales were off 30 percent.

Rural Nevada remains in a long recession spawned by a drop in gold prices. While gold prices have rebounded to nearly $400 an ounce, the economy still is dismal in much of rural Nevada.