UNLV report: Businesses in ‘downbeat’ mood over Las Vegas economy

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A UNLV Center for Business & Economic Research report released Thursday indicated local businesses were less confident in the Las Vegas economy.

Southern Nevada business decision makers have grown more pessimistic about the local economy, despite gains in key areas including visitor volume, gaming win and taxable sales.

That’s according to UNLV’s Center for Business & Economic Research, which Thursday issued its business confidence index for the fourth quarter.

"The mood at Southern Nevada businesses remains downbeat," said the report, which suggests local perceptions are being driven in part by continued negative news about the U.S. economy as well as inflated unemployment locally (14.2 percent).

"The U.S. economy performed poorly in the first half of 2011 with real GDP (gross domestic product) increasing only 0.8 percent on an annualized basis," UNLV’s report said.

The UNLV center said its Southern Nevada Business Confidence Index slipped from 99.96 in the third quarter to 99.91 for the fourth quarter that begins Oct. 1.

"When asked how they think general economic conditions in Nevada will change in fourth quarter 2011, 25 percent of the respondents expected improvement, 44.1 percent expected no change and 30.9 percent expected a worsening," said Thursday's report. "When asked about sales in their own industry, 23.6 percent forecasted an increase, 48.5 percent expected no change and 27.9 percent expected a decline."

The report confirmed local business executives generally are hesitant about hiring and capital spending and that most haven’t sought additional credit for their companies from banks.

A big problem for Las Vegas – weak housing prices – is also a positive as it could lead to population gains by attracting retirees and companies, UNLV’s Center for Business & Economic Research said in a separate report this month.

"Once the U.S. economy starts moving, our low housing prices will be a real asset," Stephen Brown, director of the UNLV center, said in an interview Thursday.

Brown also noted another persistent problem for Southern Nevada: the near decimation of the once-dominant construction industry.

"For construction, 66.7 percent of the survey participants expect it will be after the first half of 2013 before Southern Nevada sees increases, 24.6 percent forecast increases in the first half of 2013, 7.2 percent project increases in the second half of 2012, and 1.4 percent expect gains in the first half of 2012," his report said. "None expect increases in the second half of 2011."

State statistics show that since June 2006, Nevada construction employment has declined from 146,600 jobs to 54,600 jobs.

Brown said the report issued Thursday was based on responses from 69 businesses out of several hundred that were contacted.

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