As the Las Vegas economy stands prepared to continue its expansion in 2018 and 2019, the region’s unique environment is forcing leaders to focus on workforce skills, diversification of industries, and state tax abatements to continue attracting new companies.
That’s according to leaders who spoke this week at the “State of Economic Development” conference, an event hosted by the Las Vegas Global Economic Alliance (LVGEA). The organization’s local research spotlights some intriguing viewpoints, trends and projections so your credit union can plan appropriately:
Las Vegas: Jobs, Workers, and Residents
Jonas Peterson, CEO of LVGEA, delivered the following presentation during the event to showcase Southern Nevada’s unfolding economic story—“Unlocking the Value of Jobs”:
- The local economy is diversifying from where it stood 10 years ago. The current job market now exceeds the employment peak experienced before the Great Recession—and it’s doing so with 37,000 fewer construction jobs (the hardest hit from the recession). There are also 4,400 less manufacturing jobs, 500 less information jobs, and 100 fewer jobs in mining and logging when comparing 2017 to 2007.
- The local employment market has hit a record high of 993,000 jobs. It exceeded its pre-Great Recession peak of 937,000 in mid-2016 (after experiencing a low of 800,000 from 2010 – 2011). There were 98,300 more jobs in 2017 than 2007 within the sectors of education and health services (top spot), professional and business services (second spot), trade/transportation and utilities (third spot), leisure and hospitality, “other” services, and government.
- Is the Las Vegas region creating “high value” jobs? This is now a key question as the region continues playing “catch up” with national economic growth elsewhere—especially as coastal states offer a prime opportunity to attract individuals living there who are looking for cost-effective housing. However, the good news is that a six-year climb from 50th place in job creation on a state-by-state basis (in 2011) has recently landed Nevada the No. 1 spot in the nation’s job growth (2017). The No. 2 and No. 3 states are Utah and Georgia.
- Six categories are being targeted by economic development leaders for growth potential. Over the next five years LVGEA’s board of directors will focus on: 1) business headquarters and services; 2) emerging technology; 3) logistics, manufacturing and supply-chain management; 4) finance, banking and insurance; 5) health care services and medical education; 6) gaming, tourism and conventions.
- There’s still much work to be accomplished in strengthening the local workforce. This area is a top priority as leaders hope to sustain the region’s current momentum. “High-value companies consistently tell us that the single most important factor in their location decision is the presence of an abundant skilled labor force,” said Jonas Peterson, President and CEO of LVGEA. “We believe training and education is a challenge—but also a powerful opportunity.”
- Clark County’s annual population growth is still climbing out of a post-recession low. It was 3.5 – 4.5 percent per year from the early to mid-2000s before plunging to a ½-percent in 2011. It’s now back to 2.2 percent over the past couple of years. Clark County has 2.22 million residents and will reach 2.5 million by 2025 (although the county’s share of working-age individuals 15 – 64 years old will drop from 66 percent to 63 percent). Additionally, the entire Southern Nevada residential population will hit 2.7 million by 2025.
- Tourists and other visitors to Southern Nevada will continue rising. The region touted 43 million visitors in 2017, but that’s estimated to hit 53 million by 2025.
- “Newcomers” to the Las Vegas area are younger and wealthier. New residents from other states or regions have helped bump the local area’s median household income from $36,000 in 2000 to $52,000 in 2016. Over the same period, the region’s median adult age dropped from 41 years of age to 36.
- From a price perspective, the local housing market has been meeting demand efficiently since 2014. Incomes outstripped home prices from 2009 – 2013 in the wake of the Great Recession, while from 2004 – 2008 the opposite was true—home prices outstripped incomes. However, it seems the market has finally returned to the same price-demand stability it experienced over the long-term period of 1991 – 2003.
- Approximately $13.6 billion in new capital investment is currently helping drive local economic growth. These consist of tourism and non-tourism developments, including projects such as Park MGM (former Monte Carlo), Palms Renovation, Extreme Sports Park, Project Neon, Switch, Union Village, Las Vegas Convention Center Expansion, Wynn Paradise Park, Las Vegas Stadium, and Resorts World Las Vegas.
- Las Vegas-area leaders should consider five additional “impacts” when jobs are created or attracted from out-of-state businesses. Besides a job’s salary, these “impacts” are: 1) direct impacts, 2) indirect impacts, 3) induced impacts, 4) fiscal impacts, and 5) social impacts. For example, a manufacturing company with 100 employees might pay $6 million annually in wages—but the impact’s total value is $38 million annually (providing an additional 81 jobs in the community).
- Nevada ranks No. 2 in Forbes’ “American Dream Index.” This index measures the change in economic health relative to delivering the “American dream” and creating middle-class prosperity. The seven underlying factors measured are bankruptcies, building permits, entrepreneurship, goods-producing employment, labor force participation rate, layoffs, and unemployment insurance claims. Wyoming is No. 1 and Montana is No. 3.
- Nevada ranks No. 3 in “economic growth potential” by Business Facilities’ 13th Annual Ranking Report. This measurement considers a number of factors, including but not limited to growth strategies, targeted incentives, workforce training initiatives, high-tech sector development, support for innovation and startups, and availability of low-cost energy. Colorado ranked No. 1 and Utah is No. 2.
Community Map and Annual Report
Gain deeper insight into Southern Nevada’s current economic, business and consumer landscape by viewing the following:
- A geo-demographic map (click here) of the Las Vegas-Henderson-Boulder region, Laughlin and Mesquite—including: major commercial real estate developments that are under construction or planned; residential developments; industrial parks, tourism projects; other business projects; highways and roads; points of interest; resort corridor; downtown Las Vegas; and medical districts. Other data and information includes:
- Southern Nevada “newcomer” state of origin
- Median household income by zip code
- New versus existing home market by price and sales
- Resident profile: race, population, employment, household income, and housing type
- Clark County School District enrollment
- Commercial real estate market vacancies
- Proximity distance to western U.S. cities
- The “2017 Annual Report” for the Las Vegas Global Economic Alliance (click here)—including: key performance metrics, accomplishments, economic development imperatives, global competitiveness strategy, communications reach, and operational excellence.
Recent Southern NV Forecast
Another touchpoint for credit unions to explore are the recent economic findings for Southern Nevada coming out of the “Outlook 18” conference. The event was co-hosted this past December by LVGEA and the Center for Business and Economic Research at the University of Nevada Las Vegas.
Local News Coverage
View the latest news coverage leading up to this week’s LVGEA event:
Demographic Profile and Projections: Clark County*
- Total population: 2.22 million (and will hit 2.5 million by 2025).
- Working-age individuals (15 - 64 years old): 66 percent of total population in 2015 (and will fall to 63 percent by 2025).
- Labor force (at least 16 years old who are working/looking for a job): 1.1 million out of 1.78 million adult population.
- Labor force participation rate (adults who “want” to work): 62 percent (or 1.1 million individuals).
- Unemployment rate: 5.1 percent (versus 5 in NV and 4.1 in U.S.)
- Unemployed workers: 56,100.
- Median household income: $52,000 as of 2016 (compared to $55,400 for NV and $60,000 for U.S.)
- Poverty rate: 14.6 percent (versus 13.8 in NV and 12.7 in U.S.)
- Education of population: 20 percent have a college degree; 29 percent some college; 25 percent high school diploma; and 26 percent no high school diploma.