Southern Nevada Continues to Grow

Boosted by strong construction and employment numbers, Southern Nevada's leading economic indicators suggest continued expansion and prosperity into early 2007, a local economist said.

The Southern Nevada Index of Leading Economic Indicators moved up to 133.02 in January, compared with 132.16 in December and a revised 130.3 in January 2005.

All 10 categories in the index showed growth from a year ago. Six of the series grew by double digits, including a 75.1 percent increase in commercial building permit valuation to $161 million, a 71.6 percent in residential building permits to 3,236 and a 67.3 percent increase in residential permit valuation to $363.3 million.

"The broad sweep of expansion shows clearly in the percentage change for the same month a year ago," said Keith Schwer, director of the Center for Business and Economic Research at University of Nevada, Las Vegas.

The economic index is a six-month forecast from the month of the data (November), based on a net-weighted average of 10 series after adjustments for seasonal variations.

The accompanying Review-Journal chart includes several of the index's categories, along with data such as new residents and employment and housing numbers, updated for the most recent month for which figures are available.

John Restrepo, principal of Restrepo Consulting Group in Las Vegas, said he doesn't see any softness in the Las Vegas economy, except that it is running at about the twice the national average in construction jobs as a percentage of total employment.

"Construction employment is not as stable as other employment, so that's cause for some concern," he said. "Other than that, the economic fundamentals appear to be pretty strong."

A separate construction index compiled by the center increased 0.23 percent in November from the previous month, but grew at a more pronounced 28.9 percent on an annual basis, Schwer said. Most notably, construction employment is up by more than 12,000 jobs from a year ago.

All of the series in the center's tourism index for November fell below October levels, a usual seasonal pattern, Schwer said. After adjusting for seasonality, the index posted a one-month increase of 2.9 percent and annual increase of 9.3 percent.

Total employment grew 6 percent statewide last year and is expected to slow minimally to about 5 percent this year, said Jim Shabi, economist for the Nevada Department of Employment, Training and Rehabilitation.

Las Vegas produced 60,000 new jobs in 2005, so 5 percent growth would still equate to some 45,000 new jobs this year, Shabi said.

"Things for the most part still look good," he said. "If the national economy continues to run at a good clip, if interest rates stay low, if oil and transportation and building material costs don't get out of hand, nothing's going to bring the Las Vegas economy to a screeching halt, outside of a terrorist attack."

Restrepo said everyone's year-end commercial reports reflected strong growth for 2005 and the residential market shows no signs of slowing down.