Southern Nevada is experiencing the end of its four-year economic decline and has begun to experience some economic growth, with "slight upward" job gains on the horizon due to an ongoing increase in tourism to the region, said Stephen Brown, director of UNLV's Center for Business and Economic Research.
The improvement is largely attributed to visitor volume recovering to nearly the level it reached in 2007, when a record 39 million tourists came here, Brown told an audience of 300 business and community leaders gathered this morning at M Resort for the center's twice-yearly economic outlook.
"Today's visitors look a little bit different than the one we saw in 2007," he said, explaining that Southern Nevada tourists are staying longer while gambling less.
Brown said construction, the region's No. 2 employer behind tourism, has hit bottom and is "mostly going sideways." But Brown also forecast an end to years of falling home prices in the region, which would boost consumer confidence and help the construction sector.
"You might say that's something to be unhappy about," Brown said of the decline in housing prices, now at about a third of what they were five years ago. "Las Vegas is now a relative bargain. This lower cost actually creates a benefit for the future of Las Vegas … that will help create future growth in Las Vegas."
Nonetheless, the region and the nation continue to suffer the effects of a slow economic recovery because of the broad financial crisis, the deep recession, an economy marked by uncertainty and limited lending by small and large banks.
The continued decline in spending by state and local governments will serve as an additional drag on recovery, Brown said, but a double-dip recession isn't imminent. Instead, a broad measure of indices measuring consumer confidence show that "we're on the cusp of a strong gain in U.S. economic activity," he said, projecting yearly gross domestic product growth of 2.9 percent and 3.2 percent, respectively, in 2012 and 2013.
The uptick will be accompanied by a decline in the U.S. unemployment rate from 8.6 percent in November to 8 percent by the end of 2013 — although, Brown noted, a significant portion of that decline will be driven by job seekers halting their search, no longer qualifying them as unemployed.
A panel of five community leaders later discussed the need for economic development and diversification to broaden job opportunities, accelerate an economic rebound and limit the impact of a future recession. They pointed to a series of studies pushing for a broadly diversified economy with a greater reliance on higher education, the most recent produced by the Brookings Institution and SRI International.
"This economy is not going back to the level of vitality we had before unless we change its vitality," said Don Snyder, interim dean of UNLV's William F. Harrah College of Hotel Administration, and a former president and chief executive officer of Boyd Gaming. "If we don't take this opportunity to reinvent the economy, we're just going to go through this again."
The Brookings-SRI report calls for the adoption of a statewide strategy for innovation and diversification, formation of partnerships with regional leaders, improvements in the range of economic development information available, development of initiatives that create economic clusters of employment and alignment of the state's economic development policies and programs.
"We have to have leaders who grab the bull by the horn, and we have to execute," said David Scherer, an executive vice president of the commercial real estate management firm, Grubb & Ellis. "We have to just do it; stop talking about it."