Las Vegas’ economy, all but wiped out by the recession, has regained its footing in recent years.
Wages are up, more people are working, home prices have climbed and visitor totals have broken record levels.
But in several ways, Las Vegas remains near the bottom of the pack nationally.
The valley’s unemployment, foreclosure rates and share of underwater homeowners — or borrowers whose mortgage debt outweighs their home’s value — have improved since the depths of the downturn, but they remain some of the highest in the county among large metro areas.
UNLV’s Center for Business and Economic Research plans to host a midyear economic outlook conference today at the Venetian and Palazzo. The center's director, UNLV professor Stephen Miller, spoke with VEGAS INC this week about the economy, including the housing market and the possible effects of electric-car startup Faraday Future and high-speed-transit startup Hyperloop Technologies, both of which are developing facilities at the mostly empty Apex Industrial Park in North Las Vegas.
How would you describe Las Vegas’ economy? What are its strengths and weaknesses now?
Employment is growing, and it’s been growing for some time. Incomes are actually starting to rise and underwater mortgages are down, although we still lead the nation in that category. Everything seems to be growing. We don’t see any downside at the moment. No signal of recession, nationally or locally.
Las Vegas’ unemployment rate has been chopped more than in half since the recession, to just over 6 percent, but are you concerned that it’s still one of the highest in the country?
We were ground zero for the Great Recession. We dug the deepest hole, so we had the furthest to come back from. This year should be a good year, though.
At the peak of the real estate bubble, Las Vegas had more than 100,000 construction-industry jobs, then it fell to a low of about 35,000 and is now around 55,000. What does it tell you that construction jobs are nowhere near peak?
We know in 20/20 hindsight that the construction activity was way in excess of what it should have been. We should not be hoping to return to that level of activity. But the population is growing again, and when the population grows, you need more housing, and there are some projects either about to start or that should start in the near future that should add construction jobs. I would say at the moment that the growth in construction jobs is healthy and it’s not excessive.
What is the makeup of the labor force now versus, say, five years ago?
Leisure and hospitality is still the most important component of the labor force — it’s around 30 percent in Las Vegas. The growing sectors are education and health and business and professional services. But both of those sectors, especially education and health, are below national averages in terms of the percentage of the total workforce. We’ve stayed behind.
What could get better in the economy over the next six months?
One thing we’ll talk about at the conference today is Apex Industrial Park, Faraday and Hyperloop. If they come to fruition, if they materialize as people are saying and planning, that could have a big impact on the local economy. Faraday Future has a pretty large job impact, and the jobs are well-paying jobs. In addition, there might be new firms here that supply the electric-car industry.
What could become, or continue to be, problematic in the next six months?
I really don’t see anything on the horizon. If we had a terrorist event on Las Vegas Boulevard, and if that significantly reduces our visitor volume, that would not bode well for the near future. If China runs into a significant collapse in, say, its housing industry, or its economy slows dramatically, and if the British decide to exit the European Union, that eventually would have an effect on us. The estimates are that the U.K. economy would slow significantly if Britain left.