Economic forecast cautious, but bright

Wednesday, Oct. 16, 2002 | 11:15 a.m.

CARSON CITY -- State employment officials predict the Nevada economy will pick up next year but warned there are still a lot of unknowns that could affect it such as the threat of war with Iraq or terrorist attacks.

The Employment Security Division is predicting that the number of jobs will grow by 2.5 percent in 2003 -- as opposed to no increase this year. The average jobless rate should decline from 5.7 percent to 5.4 percent next year, officials said.

Based on these figures, the division's advisory council Tuesday recommended the average jobless tax rate remain 1.29 percent, the same rate since 1999. In addition there will be a continued .05 percent assessment for job training and other employment programs.

Division Administrator Birgit Baker predicts a positive economic outlook for 2003.

Keith Schwer, director for the Center for Business and Economic Research at UNLV, called the estimates reasonable, but said there are many unknownsm such as war, that could cut into the travel and tourism business, particularly Las Vegas, which Schwer called Nevada's "great economic engine."

The state's estimates, he said, are modest based on past job growth and jobless rates.

Bob Murdock, chief of research and analyst for the state division, said the 2.5 percent predicted job growth was "not stellar" when compared to prior years when it reached as high as 11 percent. But he said it is "one of the better growth rates around the nation."

"The nation and California bottomed out," Murdock said. "It's almost like we took a year off in economic growth."

The construction and retail sectors are expected to rebound along with finance and real estate, spurred by low mortgage rates. Casino employment is still down 5,000 to 6,000 jobs, Murdock said.

But he said there have been offsetting increases in health services and business service employment. And government employment is expected to grow, mostly because of the hiring of additional schoolteachers.

Baker will hold a public hearing Nov. 18 in Carson City to set the final rate, but she and other directors have traditionally followed the advice of the council.

The state's nearly 47,000 employers pay premiums into a trust fund that provides the weekly checks to those out of work. The rate for a business depends on employee turnover. For instance, more than 12,000 employers pay a rate of 0.25 percent, far below the average. The top premium is 5.4 percent, which is assessed to 811 employers.

Those businesses that have been in Nevada less than three full years pay a 2.95 percent rate.

The percentage paid next year will be on the first $21,500 in wages of a worker.

Although comparisons are difficult because of the different wage bases in the nation.