Business leaders pessimistic about recovery

By Buck Wargo (contact), In Business reporter

Fri, Jul 3, 2009 (3 a.m.)

Anyone looking for a gauge to the Las Vegas housing market’s recovery may want to turn to local business leaders for insight. Based on their opinions, the rebound isn’t right around the corner.

Seventy-six percent of those surveyed by UNLV’s Center for Business and Economic Research said there won’t be any housing recovery before the first half of 2010 with a majority of those saying it won’t be until 2011 at the earliest.

In fact, 30.4 percent of those surveyed said there won’t be a meaningful recovery in Southern Nevada’s housing market until the second half of 2010. Another 45.6 percent said any recovery won’t happen until after 2010.

Another 21.5 percent said the recovery will occur in the first half of 2010. Only 2.5 percent said the recovery will happen this year.

The survey of about 100 people was conducted in June.

There isn’t a lot of optimism for the long-term or short-term Las Vegas economy based on the business leaders’ views.

Forty-four percent said they expect the economy to worsen in the third quarter. Another 33 percent said they expect it to stay the same and 23 percent said it will improve. They have more confidence in the U.S. economy with 34 percent saying it will improve in the third quarter while 37 percent said it will worsen.

Forty-six percent of business leaders said the most serious long-term effect of the recession is economic growth will be long and slow. Large tax increases came in second at 19 percent. Other concerns were inflation and a more socialized economy.

Thirty-five percent said they expect a decrease in sales in the third quarter while 38.5 percent expect no change and 27 percent expect an increase in sales.

Layoffs are likely to continue: 40 percent said they expect hiring will decrease in the third quarter. Another 42 percent said there will be no change while 18 percent expect hiring to increase.

All but 4 percent of those surveyed said the nation’s financial problems have affected their business with 89 percent saying it has affected them considerably or significantly.

The biggest effect has been slower or lost sales, according to 27 percent of the business leaders. Another 25.6 percent said they have bee most affected by the unpredictability of business conditions. That was followed by 24.4 percent who pointed to falling real estate values.

Twenty-one percent said the inability to obtain credit or the cost and terms of credit affected them most. Of those who requested a new line of credit for their business (excluding credit cards), 69 percent said they were not able to get a new line and 8.5 percent said they got a new line, but the terms were unsatisfactory.

Fifty-eight percent of business leaders said they opposed the bailout to stabilize financial institutions while 33 percent supported it.