Nevada’s recovery from the Great Recession gained momentum last year and is poised for stronger gains, according to Wells Fargo Bank economists in a new report.
“Construction activity ramped up, and tourism regained a sense of its former strength,” economists Mark Vitner and Jamie Feik wrote. Stronger job growth has encouraged more job seekers to move into the state, they said. Home sales and new home construction have also swelled.
The state’s real gross domestic product grew an estimated 2.5 percent in 2016 and is expect to rise 2.8 percent in 2017, the report noted. Nonfarm employment rose 2.9 percent in 2016, and the unemployment rate fell 1.2 percentage points to 5.1 percent in December.
Efforts to diversify Nevada’s economy beyond its historic dependence on gaming, tourism and retirees are among the reasons they are bullish about the state’s outlook. They cited Tesla’s first Gigafactory to make lithium-ion batteries and energy storage devices near Sparks; the ongoing development of UNLV, including the opening of a new medical school this year; and investments in highway infrastructure.
“All of these developments are now beginning to pay off in a big way, yielding stronger job and income growth just as Nevada’s mainstay gaming and tourism sectors are beginning to show some renewed vigor of their own,” they said.
Other findings include:
• Nevada’s job market hit a milestone in July, with nonfarm employment finally surpassing the previous high reached before the recession. The leisure and hospitality industry remains the largest employer, accounting for one in every four jobs added over the past year.
• Last year was the strongest year of domestic migration to Nevada since before the downturn. The resurgence in population growth has helped eat away at the oversupply of homes in Nevada. Sales of existing homes rose solidly this past year in Southern Nevada, with sales of single-family homes rising 1.3 percent and sales of condominiums rising 12.4 percent.
• Nevada’s homes have recovered about 65 percent of the value lost in the housing crisis. The state’s serious-delinquency rate now stands only 0.6 percentage points above the national average, which is immensely improved from 2014, when Nevada’s was twice that of the nation.