Economic activity following the Gulf War in 1991 moved forward without marked improvement in employment, giving rise to the term “jobless recovery”. So far, employment growth in 2003 seems stuck, leading one to surmise that the next recovery, whether already afoot or to occur in the future, might also be a “jobless recovery”. U.S. employment in May remained essentially unchanged. Nevada employment levels performed slightly better, up 1.3 percent in April from year-ago levels.
Las Vegas Metro (Clark County) has seen a 1.5 percent growth rate over the same period. Reno (Washoe County), though showing a recent step-up in the employment rate, stands 0.7 percent above year-ago levels.
During the April Iraqi War, a number of tourism-based indicators turned downward. Visitor Volume, Passenger Volume and Gaming Revenue each took a hit for Nevada and its urban areas. Though geopolitical risks remain, a rebound is expected. This rebound, however, will likely be constrained by the weakness in the U.S. economy. Even without a stronger U.S. growth rate, the Silver State’s economy will grow, but at more modest rates than historical averages.
Looking back, we can conclude that Nevada’s economy has performed better than the national economy or other states with major resort destinations. Looking to the near future, Nevada continues to attract new residents, reflecting job opportunities, desirable community amenities and profitable business opportunities. With favorable interest rates and continued in-migration, expenditures will fuel growth. Over the longer view, however, future economic prosperity will depend on creating jobs and economic activity associated with sales outside the Silver State, what is referred to as the export base.
Nevada, having developed its export base around tourism and mining, will increasingly need to recreate itself with new products and services. Competition from other states and nations will sap the state’s vitality, to be sure. Meeting this challenge calls for Nevada to create its own new products, new services, new technologies and new ways of doing business, and to rely on trade for the rest.
