Jun. 14, 2005
Copyright © Las Vegas Review-Journal
Southern Nevada indicators again strong

By HUBBLE SMITH
REVIEW-JOURNAL

Strong travel and tourism and continued job growth are pushing the Southern Nevada Index of Leading Indicators upward, even as the U.S. index has entered into a slight downward trend, local economist Keith Schwer believes.

The local index rose to 131.08 in May, up 1.23 percent from 128.84 a year ago, the Center for Business and Economic Research at University of Nevada, Las Vegas, reported.

Residential building permits and residential permit valuation were down 28.7 percent and 21.8 percent, respectively, from a year ago, the index showed. That was offset by a 49 percent gain in commercial building permits and 40 percent gain in commercial permit valuation.

Also showing double-digit increases were taxable sales at 14.5 percent, gross gaming revenue at 11.4 percent and convention attendance at 14.2 percent.

"The Southern Nevada economy continues to grow vigorously, while the U.S. economy has moved through a soft period," Schwer, director of the research center, said Friday. "Historically, the national and Southern Nevada indexes tend to move together, but the national one has been softer whereas locally we've been much stronger. Over the next six months, we'll do better than the national economy."

The indicators point to divergent paths for the local and national economies, though such divergences have been temporary in the past, Schwer said.

"As such, one might expect a slowing of the index for Southern Nevada and based on growth prospects, improvement in the U.S. index," he said.

The index is a six-month forecast from the month of the data (March), based on a net-weighted average of 10 series after adjustment for seasonal variation.

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.

The strength of the local economy grew in the first quarter, and Schwer said he thinks it will finish the year strong, though not as strong as last year.

"Critically important for us is strong job growth and a relatively low unemployment rate. Most of the optimism in the growth of Southern Nevada is in comparison with other regions," he said.

Tourism, a key sector of the local economy, enjoyed a strong March, with passenger count at McCarran International Airport reaching nearly 4 million and room occupancy above 90 percent.

Clark County's construction index, also compiled by the UNLV research center, climbed above the 200 mark in March, a jump from 188.3 in February and twice the level from a year ago. Construction has added about 17,000 jobs over the past 12 months, Schwer said.