So. NV: Stellar Growth to Slow in 2020 but Still Outpace Nation

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Southern Nevada’s recent stellar economic growth will slow down between now and late 2020 as the broader U.S. economy’s expansion continues cooling off. Gaming, tourism, and construction remain hot industry sectors even as the region’s local fundamentals are increasingly tied to the entire nation.

(View Dr. Robert Eyler’s recent Aug. 5th webinar on “Key Economic Issues Setting the Stage for Second-Half of 2019"—ACCESS ARCHIVED WEBINAR)

That’s according to the most recent forecast published by the Center for Business and Economic Research at the University of Nevada—Las Vegas (UNLV) during its “2019 Economic Update” conference in June. The keynote speaker’s opinions spotlight intriguing viewpoints, trends and projections so your credit union can plan appropriately.

Southern Nevada's economy will continue growing faster than the United States’ economy in 2019 and 2020 as the broader environment continues slowing down — although Southern Nevada is also poised to downshift. “Since Southern Nevada comprises such a large share of the Nevada economy, we generally see continued improvement in the local economy in 2019 and 2020,” the forecast report states. “We project annual population growth to remain in the 2-percent range in 2019 and 2020. Employment growth will somewhat decline, but we also forecast further declines in the local unemployment rate. After growing at just over 12 percent in 2018, the Case-Shiller housing price index for Southern Nevada will slow to 4.5 percent growth in 2019 and 4 percent growth in 2020. Visitor volume, gross gaming revenue, and hotel/motel occupancy rates will exhibit mixed to negative trends. We will see continued softness in the leisure/hospitality sector. Total personal income will experience steady and consistent growth — and slightly higher growth than Nevada as a whole."

Southern Nevada’s leading business activity index may be signaling either an economic slowdown or recession within the next 12 – 24 months based on historical patterns. Although local business activity is 9 percent higher than its last record peak in 2008, it is currently "pausing" before flatlining or rising higher by the end of 2019. The local business coincident index (historical measurement of business spending, orders, job hires and more) hit a record "275" in June 2019 (the last peak was 250). Payroll employment in the region (not including freelancers and independent contractors) hit a record 1.03 million jobs by April 2019, making the area one of the fastest-growing metropolises in jobs and new residents.

Southern Nevada’s business confidence index, which measures five different components, started flatlining in early 2019. This seasonally volatile measurement hit a record peak of “148” in 2015 and remains at 141 currently (measuring local business leaders’ expectations of sales, profits, hiring, capital investment, and overall economic conditions). Any reading increasingly above 100 shows more business leaders than not are more optimistic about future conditions for growth (and vice versa). For context, it hit a low of 40 in 2009.

Click here to view the entire forecast report!

 

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