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Las Vegas’ Economic Outlook Isn’t As Bright As It Used To Be Because Of Asymmetrical Recovery

Las Vegas' Economic Outlook Isn't As Bright As It Used To Be Because Of Asymmetrical Recovery

It has been hard on the state’s economy because of the COVID-19 virus. Many parts of the economy haven’t yet returned to their pre-pandemic state. There is still a long way to go for Nevada’s economy, but this series will look at the most important economic indicators across the state.

Preview Las Vegas, a networking and forecasting event put on by the Vegas Chamber of Commerce, took place last week and was a chance for people to meet each other and talk about the future of the Southern Nevada economy.

The event, which took place on the Raiders’ home field at Allegiant Stadium, brought together a lot of business people to talk about the city’s economy. There were more than 70 booths from national and local businesses like Bank of America and Old School Tees.

Several speakers, including Gov. Steve Sisolak, tried to show that the economy in the region is going to be great in the future. But other experts, like Applied Analysis Principal Brian Gordon, said that Nevada has a lot of problems, like a broken supply chain and unsustainable housing price rises.

Gordon began his presentation to the Preview’s 1,100 attendees with a look back at the early days of the pandemic, when toilet paper was flying off the shelves and one of the world’s largest container ships became stuck in the Suez Canal, causing global trade to be slowed down all over the world. Nearly two years later, the U.S. is still having problems with its supply chain, and Gordon said that problems at the country’s top container port in Los Angeles are still going on.

A man said there are goods worth $32 billion that are parked outside of the Los Angeles coast.

Consumers spent more money last year, which led to a rise in the prices of goods because of a rise in demand and a shortage of goods because of shipping problems. When the country’s year-over-year inflation rate was this high in December 2021, Gordon compared it to 1982, the last time the country’s inflation rate was this high. He said that prices are going up all over the market.

We have single-family homes going up 23% a year. “I’m going to tell you right now that these gains are clearly not going to last.”

Gordon’s message was very different from Sisolak’s mostly positive attitude. The Democratic governor is running for re-election this year, and Republicans are focusing on the economy when they attack him.

I want to tell you that the future of Nevada and the future of Las Vegas is brighter than it has ever been. Economic growth: “Here, we are the best in the country at it.” This is a great hotel and casino just down the street from the famous Las Vegas Strip, but they were closed just 19 months ago. People are still staying in them, though.

It’s easier to see how unevenly the economy has been improving when different people say different things about how it’s going.

It hasn’t been a uniform recovery, Gordon said after his speech. “We haven’t seen all of the people who came back.” A lot of people still work in leisure and hospitality, but we haven’t seen them all come back. During the same time, we see a lot of job growth in things like trade and transportation.

You can see it all over the state.

Gaming revenue has risen to all-time highs, but visitor volume hasn’t reached the same level as last year because of a slow return of international and convention travelers.

The unemployment rate in Nevada’s northern and rural counties has come back to pre-pandemic levels, but the Las Vegas metropolitan area still has one of the highest unemployment rates in the country.

As home prices rose, so did incomes and stock prices, which led to more household wealth last year, Gordon said. People saw the value of their assets go up, so they had more money. But homebuyers are having to pay more for their new home because construction costs are going up because there aren’t enough workers or materials.

It’s great that you sold your house, Gordon said. If you want to buy a house, I’m sorry, but it won’t happen quickly.

The Las Vegas Valley has seen a lot of new jobs, but many people have stopped working.

When he asked, “Where did all the workers go?” They’re out golfing, they’re going on vacation, and they’re watching Jeopardy on the couch.” How can I tell? They haven’t come back to work.

Nevada’s labor force participation rate, which is the percentage of the civilian noninstitutional population aged 16 and older who are actively working or looking for work, is still about 4 percentage points lower than it was before the pandemic. This is mostly due to retirees, who are less likely to be working or looking for work. Gordon said that, compared to the past, a lot more people are leaving the workforce to retire than in the past.

Gordon said that even though the job market is getting tighter, the changes in the labor market are paving the way for more economic diversification and less reliance on the volatile tourism industry, which other Nevada economists have also talked about.

“We’ve seen people move to other jobs because they’re making money somewhere else,” Gordon said. “And I think that if we can keep seeing some of that momentum, I think it just gives us more stability as we move forward.”

Southern Nevada’s economy faces a lot of problems, but experts say that Las Vegas’s growing sports tourism market and big projects in the works are good things to look forward to.

Gordon said that nearly $22 billion worth of local construction projects, including the Fontainebleau resort, the MSG Sphere, and the Dollar Loan Center in Henderson, will help the “full recovery of the tourism industry.” These projects will help.

The nearly $2 billion Allegiant Stadium, which was built less than two years ago, hosted more than 400,000 people in the second half of 2021, which is about 80% more than the number of people who were expected to come before the stadium was built.

Billy Vassiliadis, a marketing expert, said that the stadium has brought a lot of new events to Las Vegas that wouldn’t have happened without it. These events include major concerts, soccer games, and the Super Bowl, which Las Vegas will host in 2024.

“This stadium has opened up a lot more opportunities for Las Vegas, not just for tourism, but for the whole business community as well,” he said.

Vassiliadis said that the growth of sports tourism in Las Vegas is similar to how the city was remade in the 1990s when new resorts, like the Bellagio and Mandalay Bay, were built very quickly.

Steve Hill, the CEO of the Las Vegas Convention and Visitors Authority, wants to keep the growth of sports in the area.

Besides football, we’ve talked a lot about other things. Over the years, it has made Vegas what it is now. Hill said that. “I mean, it’s boxing, it’s NASCAR, it’s the Shriners Open, it’s pretty much every sport there is.” But there is still more to come, and it is making a big difference in Las Vegas.