Economic signs spur cautious optimism
Could the worst be over for Southern NevadaÕs economy?
The latest evidence, though meager mea·ger also mea·gre
1. Deficient in quantity, fullness, or extent; scanty.
2. Deficient in richness, fertility, or vigor; feeble: the meager soil of an eroded plain.
3. , indicates that Las VegasÕ economy could improve in the coming months, according to according to
1. As stated or indicated by; on the authority of: according to historians.
2. In keeping with: according to instructions.
3. Keith Schwer, director of UNLVÕs Center for Business and Economic Research.
Seven of the 10 categories of the Southern Nevada Index of Leading Economic Indicators index of leading economic indicators
An index that is compiled by the Conference Board, a private-sector consulting firm. The index is designed to indicate the future direction of economic activity. turned positive in May compared with April. However, nine indicators were down compared with May 2008. Overall, the index was down by 3.2 percent since then.
The index, using data from March on such things as gaming revenue, visitor volume, retail sales and construction, is a forecast of the economy through Sept. 1.
The numbers suggest this is the end of the sharp declines, Schwer said, but itÕs not clear how sustainable any recovery will be.
ÒNevadaÕs worst recession since the 1930s is not over, but perhaps it is coming to an end,Ó Schwer said. ÒThe index should have a clearly defined bottom and turn up for one to have some assurances that things are on the road to recovery.Ó
SchwerÕs comments about the local economy mirror what Federal Reserve Chairman Ben Bernanke and most economists are saying about the national economy: The recession could be over by the fourth quarter of this year or the first quarter of 2010. Some have suggested that even though the problems — especially home foreclosures and unemployment — are not over, the worst
appears to be past.
The national economy will be the best gauge for Las VegasÕ rebound because Southern Nevada depends on the rest of the country for tourists.
So far, that has been mixed, with consumer confidence at its highest level since September, but consumers have cut back on spending for two consecutive months and are not expected to open their wallets more until the economy improves. The nationÕs unemployment rate is expected to increase through the second quarter of 2010.
Las Vegas Las Vegas (läs vā`gəs), city (1990 pop. 258,295), seat of Clark co., S Nev.; inc. 1911. It is the largest city in Nevada and the center of one of the fastest-growing urban areas in the United States. economist John Restrepo John Javier Restrepo (b. August 22, 1977 in Medellín, Colombia) is football midfielder who played for the Colombia national football team between 2001 and 2005.
He currently plays for Tigres in Mexico. , principal of Restrepo Consulting, said there is some hope for the nationÕs economy. The Institute for Supply Management says U.S. manufacturing activity is shrinking at a slower pace and new orders placed with factories rose in May for the first time since November 2007, one month before the recession started.
ÒOne month does not make a trend, but the decline seems to have moderated a bit,Ó Restrepo said.
Some economists predict Las VegasÕ recovery will lag the nationÕs.
Last month at the International Council of Shopping Centers The International Council of Shopping Centers (ICSC) is an international trade association of the shopping center industry. The organization, founded in 1957, has 65,000 members worldwide, which include shopping center owners, developers and managers, as well as other individuals, convention, Mark Zandi, chief economist The Chief Economist is a single position job class having primary responsibility for the development, coordination, and production of economic and financial analysis. It is distinguished from the other economist positions by the broader scope of responsibility encompassing the for MoodyÕs economy.com, had a dour outlook on the region through 2010 because people across the country have little to spend on vacations to Las Vegas.
Chris Thornberg, an economist with Los Angeles-based Beacon Economics, said the nationÕs savings rate Savings rate
Personal savings as a percentage of disposable personal income. is only 5.5Êpercent and needs to reach 8 percent before people are in position to make major purchases again.
ÒIt is not a function of ÔifÕ but a function of Ôwhen,ÕÓ Thornberg said of Las VegasÕ recovery. ÒThat is the glimmer of hope, but it isnÕt going to be a speedy recovery. We are pretty close to the bottom, but we will not see any signs of growth until the second half of 2010.Ó
Nevada is like other Sunbelt states such as California and Arizona that rely on development for economic growth, Thornberg said. The recession is going to hamper the construction industry for two to three years.
The most recent Clark County Clark County is the name of twelve counties in the United States of America:
ÒThe demand has to catch up to the supply, and that is going to be a few yearsÓ away, Thornberg said. ÒIt is a deeper cycle in Las Vegas because of these forces.Ó
Casino executives, meanwhile, are optimistic about the local economyÕs recovery. UNLVÕs Clark County Tourism Index turned up in March compared with February, breaking a five-month string of double-digit declines when measured against the same months a year earlier. MarchÕs visitor volume was the highest since August.
In a conference call in May, Wynn Resorts Wynn Resorts Limited NASDAQ: WYNN was formed on October 25, 2002 by former Mirage Resorts Chairman and CEO Stephen A. Wynn. The company is based in Las Vegas, Nevada and is a developer and operator of high end hotels and casinos. Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Steve Wynn said that despite weaker quarterly results, he was Òcautiously optimistic that we have seen the bottomÓ of the tanking economy.
Wynn based his optimism on booking windows that have expanded since the middle of last year. He also said there have been indications of a return to more traditional consumer behavior.
ÒIÕm still going to be a little reticent,Ó Wynn said. ÒI donÕt know whether the stimulus package has taken effect or whether it is effective.Ó
MGM Mirage Chairman and CEO Jim Murren sounded an optimistic note about a 97 percent occupancy rate in April.
ÒItÕs still tough, but it was brutal at the early part of the year,Ó Murren said in a conference call last month. ÒI donÕt want to give false hope or expectations, but we think the worst of it is behind us.Ó
Restrepo is among those who think Las Vegas will lag the nationÕs recovery because Southern NevadaÕs recession is deeper because of the housing bust. He expects another wave of housing foreclosures this year, he said, and commercial foreclosures have yet to hit. The region has one of the highest credit card delinquency rates, he said.
Restrepo said a recovery wonÕt take place locally until late 2010 or early 2011 compared with late 2009 or early 2010 for the rest of the nation. He would measure the recovery as six months of job growth and six months of stable or increasing home prices.
NevadaÕs unemployment rate reached 10.4 percent in April. Job growth, however, is a lagging indicator Lagging Indicator
A measurable economic factor that changes after the economy has already begun to follow a particular pattern or trend.
Lagging indicators confirm long-term trends, but do not predict them. because even when the economy improves, companies are hesitant to rehire Re`hire´
v. t. 1. To hire again. until they think the recovery is sustained, he said.
ÒThe big question is — even with a national recovery by the end of this year — what spending habits will people have?Ó Restrepo said. ÒIf they go on vacation, how much will they spend? My gut feeling gut feeling Intuition, visceral sensation is they will be more conservative in their spending.Ó
Brian Gordon, a principal at Applied Analysis, said all the indicators point to a continued decline in Las Vegas, but the pace is slowing.
Problems in the housing market remain a legitimate concern because people are losing equity in their homes and facing foreclosures because of job losses, Gordon said. The stability of the housing market will be important for any turnaround, he said.
Local consumer spending remains weak, he said.
ÒFor a lot of consumers, they donÕt know what the future holds, and they are hunkering down Hunkering down
A term used to describe a trader selling off a big position in a stock. and operating much more cautiously like a lot of Southern Nevada businesses,Ó Gordon said.
Las Vegas Sun The Las Vegas Sun is one of Las Vegas, Nevada's two daily newspapers. It is owned by the Greenspun family and is affiliated with Greenspun Media Group.
The paper was published in the afternoons on weekdays from 1990-2005. reporter Richard N. Velotta contributed to this story.
A version of this story appears in this weekÕs In Business Las Vegas, a sister publication of the Sun.
Brian Wargo can bereached at 259-4011 or at firstname.lastname@example.org.