Job and population growth, lower unemployment, easing foreclosure numbers, a strengthening housing market and broad-based, consistent growth in taxable sales have led the state’s chief economist to conclude that Nevada has escaped the grip of the Great Recession.
Bill Anderson, chief economist for the Nevada Department of Employment, Training and Rehabilitation, said today that most economic indicators are showing slow, sustainable growth that bodes well for the state’s economic picture this year.
Anderson made his remarks during a conference call sponsored by Las Vegas-based Union Gaming Group, an investment company centered on the gaming industry.
While Anderson said Nevada’s economic picture is bright, two things could hurt the recovery: national financial policy issues that could derail the country’s economic upswing and spikes in energy markets that could discourage travel to Southern Nevada.
He said another “fiscal cliff” debate could lead the nation down a negative path and that local economists will be closely watching gasoline and jet fuel prices.
And then there are the unpredictable events that could hurt Nevada, such as terrorist events and unexpected military actions.
“If the national economy stumbles, we’ll definitely feel the impact,” Anderson said. “We once thought we were recession-proof, but in 2008, we obviously found that we aren’t.”
Anderson said he doesn’t expect actions in the upcoming Nevada legislative session to have a negative impact on the economy, because approving a balanced budget is written into the state’s Constitution and the state has a reputation for being fiscally well-managed.
He expects lawmakers to debate education, workforce development and economic development and diversification strategies, which he called “the superstructure of a strong economy.”
Anderson explained how Nevada’s economy plummeted after about two decades of expansion that most now acknowledge was not sustainable.
“Historically, we were one of the fastest growing states in the nation for 20 years,” Anderson said. “But we became — and I hate to use this term — Ground Zero for the recession. We took a very hard hit.”
Now, he said, growth isn’t as supercharged. While it doesn’t match the boom times, it’s modest and more sustainable, he said.
Anderson said 2012 closed on a strong note in job growth, with a 1.5 percent increase over the previous year. In late February or early March, he said, his office may revise projections to 2 percent, which means more than 20,000 additional jobs.
The number of discouraged workers — those who have run out of unemployment benefits and are no longer seeking work — has started to trend down.
Wage levels, which took a major tumble in the recession when high-paying construction jobs left the state, have rebounded and were up 2.5 percent in 2012 from a year earlier. They now match the rate of inflation.
Housing values have increased and Nevada no longer leads the nation in foreclosures.
Nevada was the sixth-fastest growing state in 2012, a result of the perception of opportunity and a favorable quality of life, Anderson said.
“People follow the jobs, and that’s what’s fueled our population growth,” Anderson said. “Many see our economy rebounding, the job picture is improving and people are realizing that.”
Anderson said a renewed effort by state policy makers to diversify the economy has helped.
“It became evident that we can’t rely on construction, leisure and hospitality to lead the way, and we’ve become more active in the economic development arena,” Anderson said. “We’re not seeing megaresorts popping out of the ground, yet more businesses are being attracted to come here. Nevada is well positioned to take advantage of the clean energy movement, wind and our geothermal resources in the north.”
Nevada’s location also positions the state as a transportation hub, and warehousing and logistics have expanded in Northern Nevada.
The mining industry also continues to be strong, Anderson said. While the biggest benefit of a strong mining industry is to rural counties, where jobless rates are the lowest in the state, equipment and parts sales that support the industry have benefited the state’s urban areas.