Study: Nevada will continue to lead Western growth

Kevin Rademacher

Thursday, June 26, 2003 | 11:03 a.m.

Despite growth numbers weaker than Southern Nevada's heyday of the 1990s, the local economic outlook continues to outshine that of its Western neighbors, a study released Wednesday by UNLV said.

"It's modest growth in Las Vegas relative to a historical standard, but Las Vegas will be a growth center among neighboring states," said Keith Schwer, director of the Center for Business and Economic Research at the University of Nevada, Las Vegas.

In the Midyear Economic Outlook, Schwer and study co-author Mary Riddel pointed to projected gains in two of Las Vegas' critical industries: tourism and construction.

Riddel said that while hotel room inventory is expected to grow by just 3 percent this year and a very low 1.4 percent in 2004, gaming revenue is expected to rise by 2.3 percent and 3.3 percent, respectively. "It's certainly not something to be too excited about, but it is certainly better than other destinations," she said.

In 1990, gaming revenue jumped almost 20 percent. It was up about 15 percent in 1994 and 1999. Riddel said the lack of an advertising blitz that accompanies a major new resort is muting the current expectations. Pointing to 2005, however, she said the addition of Steve Wynn's new Strip property, Wynn Las Vegas, could bolster figures.

With fewer hotel rooms being added, employment in the hotel industry grew by just 1.4 percent in the first quarter of 2003. That's better than the 7 percent decrease recorded during the 16 months following Sept. 11, 2001, but well off the peak hotel industry employment surge of 9.1 percent from January 1995 to February 2001.

Since Sept. 11, construction jobs have proven more resilient, Schwer said in his forecast, growing by 5.4 percent this year, and posting 1.1 percent growth in the months following Sept. 11.

Construction jobs should continue to prosper. Riddel predicted that 31,193 housing permits will be issued in Southern Nevada this year and another 32,440 next year, an increase of 6 percent and 4 percent, respectively.

She did temper her forecast, however, with a warning that rising interest rates could slow construction demand in 2004.

Overall, Southern Nevada employment is expected to grow by 2.4 percent by the end of the year and 3.5 percent in 2004, the UNLV forecast said.

Personal income also is expected to rise in Southern Nevada by 5.8 percent in 2003 and 6.3 percent in 2004.

"It's very consistent with a modest recovery," Schwer said.

Those income figures mark the strongest increases since income rose 8.8 percent in 2000. Southern Nevada had it's largest income growth in 1989 when it hit 15.8 percent.

The forecast projected Nevada's 2003 job growth rate at 2.9 percent. That would out pace 2.3 percent growth in Arizona and a 1.4 percent rate in Arizona. California is expected to finish the year with job growth of just 0.8 percent.