Las Vegas Sun

March 28, 2024

Real Estate:

Survey: Local economic recovery not seen in near future

Local business leaders remain pessimistic about a recovery in Southern Nevada’s economy anytime soon and are hesitant to hire people and make capital expenditures, according to a survey by UNLV’s Center for Business and Economic Research.

Forty-six percent of the 103 business leaders surveyed said they expect the economy to remain the same and 34 percent said they expect conditions to worsen. Only 20 percent expect any improvement in the short term.

On an improvement, 76 percent said it would occur in the second half of 2011 or later. Nineteen percent said it would occur in the first half of 2011 and 5 percent said it would occur this year.

As for the U.S. economy, 53 percent expect improvement and 22 percent expect conditions to worsen nationwide.

In Southern Nevada, 69 percent said they expect their company’s profits to remain the same or decrease with 38 percent projecting no change.

Because of that, few are expecting hiring to pick up anytime soon. Only 11 percent expect an increase in hiring and 26 percent expect a decrease. The rest expect no change, according to the survey.

Firms generally aren’t planning on increasing their capital expenditures with only 13 percent predicting that. Thirty-one percent said they would trim capital expenditures.

The majority of those surveyed said the decline in the housing market has mostly played out and that further impact on the local economy would be small, said Mary Riddell, the center’s interim director.

Twenty-six percent said they expect a mild slowdown in the housing market and that the slowdown will affect their business. Thirteen percent said they expect a substantial slowdown. Another 29 percent said they expect a modest decline in sales, but it won’t affect their business and 32 percent said the housing market has bottomed out.

Contractors’ report gloomy

In its first quarter report, the Associated General Contractors of Las Vegas said that over the previous 12 months, 253 commercial permits were issued by local governments for major projects with a total value of $609.3 million.

That is down from 595 permits valued at $980 million for the 12-month period that ended in March 2009.

The office market had 221,000 square feet under construction in the first quarter, down from 1.9 million square feet in the first quarter of 2009.

The retail market had 809,760 square feet under construction in the first quarter, down from 2.2 million in the first quarter of 2009.

The industrial market had 53,000 square feet under construction in the first quarter, down from 807,000 square feet in the first quarter of 2009.

The number of single-family home permits issued in March was 730, up from 239 in March 2009. Eight apartment units got permits, down from 520 in March 2009.

In March, construction employment stood at 47,700, down from 51,200 in February and 71,800 in March 2009.

Population growth in Las Vegas as measured by people surrendering their driver’s license was up slightly in March with 3,813 licenses turned in, up from 3,788 in February. The March total is about 900 fewer than March 2009.

Although construction remains at a near standstill because of overbuilding, the Southern Nevada construction industry is pushing for more government spending on infrastructure.

The Associated General Contractors is calling for the region to rethink how it funds capital projects such as roads, water and flood control.

Capital programs have depended on growth revenue such as connection charges, development fees and property transfer taxes, but Steve Holloway, the group’s executive vice president, said it’s unfair to have the construction industry bear a “substantial share of community infrastructure costs” when there are few projects being built.

Growth had paid for growth, but the slowdown in construction of homes, office buildings and hotels has reduced the community’s ability to pay for parks, schools and roads, he said.

“As this cycle rapidly comes to an end, those dollars will either need to be made up from another source or Southern Nevada will see a serious deterioration in its core infrastructure,” Holloway said.

The group said local governments have identified 395 shovel-ready public projects that range from road improvements to sewer projects to school modernization.

In other news

• The Southern Nevada chapter of NAIOP, the development organization, will host a panel discussion on the role of commercial development in the new energy economy. The program starts at 7:45 a.m. May 20 at the Orleans. Speakers are Robin Reedy, Gov. Jim Gibbons’s chief of staff; David Sims, director of project development for renewable energy for NV Energy; and Gregory Heath, renewable energy project manager with the Bureau of Land Management. For more information, call 798-7194.

Buck Wargo covers real estate and retail for In Business Las Vegas and its sister publication, the Las Vegas Sun. He can be reached at 259-4011 or at [email protected].

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