A monthly report produced for CommerCe reAl estAte solutions by stephen P. A. Brown, PhD, Center for Business & economic r...
neVADA’s ECONOmy April 2011Construction of single-family homes in Nevada is also              than those in other western ...
nevADA econoMic conDitions            u.s.                     Date           units                  current       previou...
This information is provided compliments of                      Michael M. Lawson             President and CeO Of COmmer...
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Nevada Economy April 2011


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Nevada Economy April 2011

  1. 1. A monthly report produced for CommerCe reAl estAte solutions by stephen P. A. Brown, PhD, Center for Business & economic research university of nevada, las Vegasissue 4 April 2011 To receive this newsletter via e-mail, please visit www.comre.com/subscribeAn AccelerAting recoveryin the WestAs economic activity in nevada’s neighboring western states improves—particularly inpopulous California—nevada will see increased tourism, hospitality and gaming activity.In 2010, Nevada gaming revenue increased by only 0.1 Non-Farm Employment Growth Outlookpercent. According to the Western Blue Chip Economic 2010 2011 2012 table 1Forecast, a survey of experts conduced by the W.P. Carey state % change % change % changeSchool of Business at Arizona State University, Nevada Arizona -2.1% 1.4% 2.3%gaming revenue will increase by 3.1 and 3.0 percent in 2011 California -1.4% 1.2% 2.0%and 2012, respectively. Colorado -1.1% 1.1% 1.7% nevada -2.8% -0.4% 1.2%Despite forecasting fairly strong gains in gaming revenue, new mexico -1.3% 1.0% 1.9%the Nevada experts participating in the Western Blue Chip oregon -0.7% 2.2% 2.8%Economic Forecast see only a slow turnaround in the overall utah -0.6% 1.4% 2.7%Nevada economic activity with some acceleration in 2012. Washington -1.5% 1.4% 2.6% Source: Western Blue Chip Economic ForecastMost of the western states experienced weaker economicconditions in 2010 than the nation as a whole. Although Growth Rate of Personal Income OutlookU.S. economic activity increased in 2010, total U.S. 2010 2011 2012 table 2nonfarm employment dropped by 0.7 percent from 2009 to state % change % change % change2010. Most western states saw bigger declines. According Arizona 2.1% 3.6% 4.6%to the Western Blue Chip Economic Forecast, the outlook California 2.5% 3.9% 4.2% Colorado 2.2% 4.1% 4.5%for Nevada’s neighboring states should expect substantially nevada 0.3% 1.1% 2.2%improved economic conditions for the remainder of 2011 new mexico 3.5% -2.7% 3.2%and through 2012. However, Nevada will expect a decrease oregon 2.6% 4.3% 4.7%before rebounding, Table 1. Similar gains are expected utah 2.3% 4.5% -3.5%in personal income, increasing the remainder of 2011 Washington 2.5% 4.8% 4.9%and throughout 2012, including Nevada. However, New Source: Western Blue Chip Economic ForecastMexico and Utah are expected to both experience a year ofdecreases, Table 2. This report is commissioned byBecause many of the visitors to Nevada come from Commerce Real Estate Solutionsneighboring western states, some of the Silver State’s info@comre.com • 801-322-2000economic weakness in 2010 can be attributed to generallypoor economic conditions throughout the west.
  2. 2. neVADA’s ECONOmy April 2011Construction of single-family homes in Nevada is also than those in other western states—which are expected toprojected to remain subdued. In 2010, permits for the see gains in permits for single-family homes that range fromconstruction of single-family homes fell by 4.9 percent. 7.3 percent in New Mexico to 27.8 percent in CaliforniaAccording to the Western Blue Chip Economic Forecast, this year and from 14.8 percent in Colorado to 63.2 percenta decline of 0.5 percent is expected for 2011 with a modest in California in 2012.gain of 2.9 percent projected for 2012. These figures showmuch weaker expectations for Nevada’s housing marketnevada economic conditionsAlthough the U.S. economy showed uneven signs of growth March, and the unemployment rate fell to 13.2 percent,in first quarter 2011—with increasing employment and Table 4.slowing GDP growth—the Nevada economy continues toshow signs of improvement. The state’s economic recovery is clark county outpacing nevada in recoveryconcentrated in the sectors on which the Nevada economy Clark County is setting a somewhat stronger pace ofis most heavily reliant—gaming, hospitality and tourism. recovery than Nevada as a whole. Compared to a yearMining, specialty construction and some business services earlier, March visitor volume was up by 5.2 percent, andare also making contributions. The housing and commercial gaming was up by 7.2 percent. In March, taxable sales werereal estate markets continue to see an overhang of vacant 3.2 percent above those for the same month a year earlier.properties in most areas of the state, and a recovery in those Residential construction permits continued to rise throughsectors is still waiting for strong growth of the Silver State’s March. Las Vegas employment rose by 10,100 jobs (1.3economic base to be reestablished. percent) in March, and the unemployment rate fell fromu.s. economic growth slowed in First Quarter 13.7 percent to 13.3 percent, Table 5.The U.S. economy slowed noticeably in the first quarter, Washoe county economic Activity Mixedwith real GDP growth dropping to 1.7 percent at an Washoe County’s economic indicators remain mixed inannualized rate—considerably weaker than the 3.1 percent early 2011. Compared to a year earlier, March visitor volumefigure posted for fourth quarter 2010. Despite evidence of was down by 10.8 percent while gaming was down by 7.1weakening economic activity, U.S. nonfarm employment percent. Residential construction permits continued risingrose by a robust 244,000 jobs (seasonally adjusted) in in March. Reno-Sparks employment rose by 600 jobs (0.1April, marking the seventh straight month of job increases. percent), and the unemployment rate notched downward toIn addition, retail sales and real personal consumption 13.1 percent, Table 6.spending continued to rise in March. Sales of new homesalso rose in March after a three-month downward slide. nevada economic outlookSales of existing homes also rose in March after fallingin February. Consumer confidence rose slightly in April, With the national economy showing continued employmentafter falling in March. The Kansas City Financial Stress growth, the Nevada economy is showing modest signs ofIndex fell in April and remained below its long-run average, recovery—even with a downdraft in the overall pace ofsuggesting that the financial headwinds to U.S. economic U.S. economic growth. The increasing willingness of U.S.growth remain low, Table 3. businesses to hire should boost U.S. consumer confidence and spending and help stimulate economic growth innevada economy showing Definite signs of recovery Nevada. Despite concerns that higher food and energy prices will slow the national economy and reduce discretionaryWith U.S. consumption spending growing, the Nevada spending, most of the news from Nevada’s tourism, gamingeconomy shows definite signs of recovery. In the first three and hospitality sectors remains favorable. Nevada’s realmonths of 2011, visitor volume was higher than a year estate and construction sectors are also showing some signsearlier. March gaming revenues were 5.1 percent above of life.a year earlier, and taxable sales were up by 4.3 percent.Nevada employment rose by 10,500 jobs (1.0 percent) inCOmmERCE REal ESTaTE SOluTIONS | Comre.Com
  3. 3. nevADA econoMic conDitions u.s. Date units current previous change year Ago changetable 3 employment 2011M4 million, sA 131.028 130.784 0.2% 129.715 1.0% unemployment rate 2011M4 %, SA 9.0 8.8 0.2% 9.8 -0.8% Consumer Price index 2011M4 82-84=100, NSA 224.4 223.5 0.4% 217.6 3.1% Core CPi 2011M4 82-84=100, NSA 223.7 223.3 0.2% 220.8 1.3% employment Cost index 2011Q1 89.06=100, SA 113.2 112.8 0.4% 111.4 1.6% Productivity index 2011Q1 2005=100, SA 112.6 112.4 0.2% 111.4 1.1% retail sales 2011M4 $billion, sA 389.355 387.371 0.5% 361.942 7.6% Auto and truck sales 2011M4 million, sA 13.13 13.07 0.5% 11.25 16.8% Housing starts 2011M3 million, sA 0.549 0.512 7.2% 0.634 -13.4% real GDP*** 2011Q1 2000$billion, SA 13,438.8 13,380.7 1.7% 13,138.8 2.3% u.s. Dollar 2011M4 97.01=100 95.543 97.143 -1.6% 101.763 -6.1% trade Balance 2011M3 $billion, sA -48.179 -45.439 6.0% -40.571 18.8% S and P 500 2011M4 monthly close 1,363.61 1,325.83 2.8% 1,186.69 14.9% Real Short-term Rates* 2011M4 %, NSA -0.13 -0.04 -0.1% 0.12 -0.2% treasury Yield spread 2011M4 %, NSA 3.40 3.31 2.7% 3.69 -7.9% nevada Date units current previous change year Ago changetable 4 employment 2011M3 000 employees 1,114.4 1,103.9 1.0% 1,108.6 0.5% unemployment rate* 2011M3 %, NSA 13.2 13.6 -0.4% 14.9 -1.7% taxable sales 2011M2 $billion 2.924 3.009 -2.8% 2.804 4.3% Gaming revenue 2011M3 $million 958.73 881.83 8.7% 911.98 5.1% Passengers 2011M3 passengers 3.989 3.280 21.6% 3.907 2.1% Gasoline sales 2011M2 million gallons 79.63 89.76 -11.3% 80.71 -1.3% Visitor Volume 2011M3 million visitors 4.278 3.656 17.0% 4.127 3.7% clark county Date units current previous change year Ago changetable 5 employment 2011M3 000 employees 803.4 793.3 1.3% 799.5 0.5% unemployment rate* 2011M3 %, NSA 13.3 13.7 -0.4% 15.1 -1.8% taxable sales 2011M2 $billion 2.174 2.252 -3.5% 2.106 3.2% Gaming revenue 2011M3 $million 835.68 769.53 8.6% 779.49 7.2% residential Permits 2011M3 units permitted 454 246 84.6% 740 -38.6% Commercial Permits 2011M3 permits 31 10 210.0% 13 138.5% Passengers 2011M3 million persons 3.637 2.978 22.1% 3.557 2.2% Gasoline sales 2011M2 million gallons 55.28 63.10 -12.4% 56.21 -1.7% Visitor Volume 2011M3 million visitors 3.730 3.160 18.0% 3.544 5.2% Washoe county Date units current previous change year Ago changetable 6 employment** 2011M3 000 employees 187.5 186.9 0.3% 187.3 0.1% unemployment rate* 2011M3 %, NSA 13.1 13.2 -0.1% 14.5 -1.4% taxable sales 2011M2 $billion 0.359 0.374 -3.9% 0.371 -3.1% Gaming revenue 2011M3 $million 61.15 55.73 9.7% 65.85 -7.1% residential Permits 2011M3 units permitted 57 49 16.3% 31 83.9% Commercial Permits 2011M3 permits 5 11 -54.5% 9 -44.4% Passengers 2011M3 million persons 0.349 0.299 16.5% 0.347 0.5% Gasoline sales 2011M2 million gallons 12.41 13.45 -7.7% 12.79 -3.0% Visitor Volume 2011M3 million visitors 0.344 0.321 7.2% 0.386 -10.8%*Change in percentage rate**Reflects the Reno-Sparks MSA which includes Washoe and Storey Counties***Recent growth is an annualized rateSources: Nevada Department of Taxation; Nevada Department of Employment, Training, and Rehabilitation; UNR Bureau of Business and EconomicResearch; UNLV Center for Business and Economic Research; McCarran International Airport; Reno/Tahoe International Airport; Las VegasConvention and Visitors Authority; Reno-Sparks Convention and Visitors Authority; U.S. Department of Commerce; U.S. Bureau of Labor Statistics;U.S. Census Bureau; U.S. Federal Reserve Bank.Note: NSA = Not Seasonally Adjusted, SA = Seasonally Adjusted issue 4 | ©Copyright 2011 - All Rights Reserved
  4. 4. This information is provided compliments of Michael M. Lawson President and CeO Of COmmerCe real estate sOlutiOns CommerCe real estate solutions Mike Hillis, CCIM, SIOR 3800 Howard Hughes Parkway, Suite 1200 Las Vegas, NV 89169 managing Partner Of COmmerCe real estate sOlutiOns, las Vegas Tel (702) 796-7200 • Fax (702) 796-7920 www.comre.com tO reCeiVe this newsletter by e-mail, Please Visit www.COmre.COm/subsCribe This report has been prepared solely for information purposes. It does not purportCOMMeRCe is a regional real estate firm with international ties, to be a complete description of thededicated first and foremost to our clients. With the industry’s markets or developments contained inpremier professionals, and industry leading technology, our mission this material.is to exceed our clients’ expectations through service excellence. The information contained in this report,For further information on the Nevada commercial real estate while not guaranteed, has been securedmarket, visit www.comre.com or call 702-796-7200. from sources we believe to be reliable.