The Las Vegas economy may be improving but little of that is translating to the construction industry, according to a group that represents contractors.
Labeling itself a beleaguered industry, the Associated General Contractors of Las Vegas in a first quarter report said demand for construction projects has yet to pick up despite improvements in tourism, the gaming industry and retail sales.
Even though employment has risen, construction-related employment continues to fall. The latest numbers show a year-over-year decline of 8.4 percent, from 45,000 to 41,200 workers, the group said.
Commercial permitting is up from last year when construction essentially stopped, but much of the new commercial permits are remodeling and tenant improvements, according to the AGC. That trend isn’t expected to improve because of weakness in the new home construction market and commercial buildings with high vacancy rates, limiting demand for new construction.
The value of construction projects over a 12-month period ending in the first quarter was $161.6 million, down from $604.1 million recorded at the end of the first quarter of 2010, the group said.
The office vacancy rate at 24.1 percent and industrial vacancy rate at 17.9 percent are higher than a year ago, the AGC said.
“New construction simply can’t compete with standing inventories, a condition likely to persist over the next two years,” the report said.
The AGC said one bright spot is stronger than expected population growth, with 5,334 people from out of state surrendering their driver’s licenses in March, up from 4,437 in February and 3,813 in March 2010.