Southern Nevada growth may be slowing

Monday, Oct. 29, 2001 | 9:34 a.m.

For most of the past two decades, Southern Nevada has had the fastest growing urban population in the country.

The boom in tourism and gaming also meant thousands of new jobs in construction, retail and services.

But a national economic downturn, exacerbated by the Sept. 11 attacks, could affect the pace of growth in Southern Nevada. It would mean fewer jobs to go around, both for existing residents and thousands of hopefuls still moving to the region.

Mike Martin, an electrician, is one of those thousands. He and his family moved to Clark County in January, after his wife landed a job. Martin had frequently traveled here for work in the past, so it made sense to relocate from Southern California.

Ten months later, he is at the Nevada Job Link offices -- the state's employment center -- looking with a friend, Alex Herrera, a heavy equipment operator. Both are members of the local International Brotherhood of Electrical Workers.

Both say they have had little or no construction work for months, and they aren't optimistic about their prospects. Martin is thinking about leaving Las Vegas for work.

He advises those considering a move to Las Vegas to reconsider.

"They've got no reason to come here," he said.

Since Sept. 11 thousands of others have joined Martin in the search for work. In an ominous statistic released Friday by the federal Bureau of Labor Statistics, 10,762 new unemployment compensation claims were registered in Nevada last month.

That's the highest number since the agency began tracking new claims from "mass layoff" events in 1995, and almost six times as many as last September. It also is a huge leap from just a month earlier -- August recorded 1,958 new unemployment claims in Nevada, about average for the state.

The statewide unemployment rate isn't as dramatic, but still significant. Preliminary numbers from the federal Bureau of Labor Statistics show it was 4.8 percent last month -- up from 4.1 percent a year ago. But the number actually dipped in September from August's 5 percent.

Those numbers may appear scary at first glance, but economists believe that it will take at least six months to get a good idea of what is happening to the Southern Nevada economy.

For example, some local industries still appear bullish.

The number of building permits secured in September in Las Vegas, North Las Vegas, Henderson and unincorporated Clark County was 1,745 -- up almost 17 percent over September 2000, Monica Caruso, a spokeswoman for the Southern Nevada Home Builders Association, said.

In Clark County alone builders have secured 9,167 permits for new homes so far this year, a 28 percent increase over the same period last year.

"I don't think the builders would have been pulling permits to build unless there were people to build them for," Caruso said.

The previous estimate of 22,000 new units for the year could dip slightly, she said, but would likely still be above 20,000 new homes this year -- hardly signs of a crushing economic downturn.

The closely watched number of drivers' licenses issued by the Nevada Department of Motor Vehicles roughly indicates how many people are moving to the state, and shows people are still moving here in high numbers, though the growth has slowed.

Last year through September the department issued 63,046 licenses to people from out of state. Through September of this year, the department has issued 62,859 licenses to people moving here, a statistically insignificant drop of 0.3 percent.

But economists locally and for the state said they will not be surprised if Clark County and Nevada see slower growth in the next year, given national trends.

"We've been basically running along with the national economy," Keith Schwer, director of UNLV's Center for Business and Economic Research, said. Recessions or periods of slow growth in the early 1980s and 1990s brought flat growth rates to Southern Nevada, he noted.

The economy was already slowing before the Sept. 11, and the terrorist attacks were a significant economic blow throughout the country. By the end of the year, the United States is likely to be in recession, Schwer said, and Las Vegas will suffer with everyone else.

"We will have an official recession," he said. "The question is how long."

Jim Shabi, an economist for the Nevada Department of Employment, Training and Rehabilitation, said his agency -- which tracks job creation, unemployment and other economic indicators -- cannot yet define a strong trend. What numbers it has show that the pace of growth is dropping.

"There was nothing in the September numbers that showed anything except that growth was continuing to slow," Shabi said, although he emphasized that growth is still occurring.

He said people shouldn't be surprised by that.

"What is normal? What has happened in the last 10 years, or everything before that?" Shabi asked. "One year we had 9 percent job growth. It has been such exceptional, phenomenal growth.

"It's still growth, but slower growth," he said.

Even that slower pace could be a blip on a larger pattern.

Schwer's best guess is that Southern Nevada will be back on the high-growth road by the end of next year. But he cautions that the turnaround depends on what happens nationally and internationally.

"If there were ever a shadow of a doubt that we are very much dependent on events in the world, Sept. 11 changed that," he said. The attacks sparked big cutbacks in air travel, which is still down by about 10 percent at McCarran International Airport, and the loss of 10,000 or more jobs at the region's casino-resorts.

The economy and the attacks derailed some resort development plans -- projects that are the meat and potatoes for local construction workers. Commercial construction workers can make up to $40 an hour.

Steve Holloway, executive vice president of Associated General Contractors, a regional trade group, said some of his members are laying off workers, a trend that was expected even before Sept. 11.

"I think that is what is happening now," he said. "We've been expecting a dip, and we've gotten it."

He said layoffs occur even in the best times in the highly competitive construction industry, and the increase in layoffs since the attacks is still small.

Some construction fields are still solid, particularly in public works, Holloway said. Regional governments continue to build roads, schools and other projects to catch up with two decades of growth that doubled the local population.

And some big commercial projects next year, including some that could gear up in the first quarter, provide a bright note to construction prospects, Holloway said.

Strip construction is likely to get a shot in the arm when work on the Mandalay Bay convention center and on Turnberry Place, a $700 million condominium complex, resumes in January, Clark County Building Department Assistant Director Dean Friedli said.

Steve Wynn's La Reve, on the site of the former Desert Inn resort, also is likely to bring jobs, although Friedli said it will be three or four months at the earliest before construction can begin there.

Kara Kelley, Las Vegas Chamber of Commerce chief operating officer, expects the region to return to strong growth next year.

"The national economy is going to contract for a short while, but it is already showing signs of recovery in some areas," she said. "The biggest challenge for Nevada and Southern Nevada is to get tourists coming back to our economy and get them spending at levels that they were."

Others share her confidence.

Henry Cedillo, 44, moved here four months ago from Kingman, Ariz., and is one of thousands who are still flocking to the region seeking work. Cedillo, who is staying with his son, spent a few hours this week sending resumes out from the Nevada Job Link office in Henderson.

"There's people who still make good money around here," Cedillo, who's looking for a sales job, said. "There's opportunities here."

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