Vegas economy starting to mend

Ken Ritter

Wednesday, Dec. 19, 2001 | 11:01 a.m.

Southern Nevada is beginning to bounce back from recession and the effects of the Sept. 11 terrorist attacks, a UNLV economist said Tuesday.

"We took a hit," said Keith Schwer, economics professor and director of the Center for Business and Economic Research. "But the most significant effects have occurred and we're recovering."

Schwer has charted the Las Vegas area economy for a decade. He said Southern Nevada could see 1 percent or less overall growth in 2002, compared to 2001.

"The sharp drop in tourism following the attacks ... had a large and immediate impact on the local economy," Schwer said in a report that forecasts a "shallow recession" stretching through next year.

The analysis came as no surprise to conference attendees.

"It's basically what we thought," said Alan Nelson, a rental property agent with Camden Property Management in Las Vegas. "We're in a recession and we're feeling the effects like everyone."

Employment in Clark County could drop .6 percent in 2002, with 5.8 percent fewer homes built, gross gaming revenues sliding .3 percent and visitor volume dipping about .6 percent, Schwer said in his report.

He projected the area population would still increase 4 percent and predicted that total personal income would increase 3.7 percent -- softening the negative factors.

All his indicators showed growth in 2003.

"The key issue here is southern Nevada is already in a renewal phase," Schwer said in an interview, adding that he believes Las Vegas entered the national recession later and will emerge earlier than other areas.

He warned, however, that another terrorist attack, a new war effort or energy disruptions could lead to a worst-case scenario and the loss of almost 35,000 jobs in southern Nevada.

"I'm hoping he's right -- that Las Vegas recovers quicker," mortgage agent Jim Zurbriggen said, "because what I've been hearing is that it'll be the other way around."

Schwer said the tourism, entertainment, hotel and gambling economy plodded through the summer and was ripe to fall when terrorist attacks leveled the World Trade Center in New York and damaged the Pentagon outside Washington D.C.

As he did a year ago, he preached economic diversification and stepped-up efforts to lure high-tech companies to Nevada by beefing up the computer-literate work force and offering tax and business cost breaks.