LAS VEGAS – Nevada has the fastest-growing economy in the nation, and Las Vegas is the driving force behind that growth, according to the Regional Intelligence Report presented this week at the Bank of Nevada Fall Economic Forum by economist Dr. Christopher Thornberg of Beacon Economics.
The expanding economy — statewide and in Clark County — is reflected in employment growth and an increase in the labor force. Clark County’s total nonfarm employment grew by 3.0 percent between June 2017 and June 2018, higher than national nonfarm growth of 1.7 percent. Also, for the first time, Clark County’s nonfarm workforce hit 1.0 million in June 2018, a 25 percent increase from 2010.
The Las Vegas area was one of just four areas in the United States to reach an unemployment drop of 0.8 percentage point between June 2017 and June 2018. Although Clark County’s unemployment rate of 4.5 percent is higher than comparable metro areas including Denver, Phoenix, and the California Inland Empire, none of those areas achieved Clark County’s 0.8 percentage point decrease in the unemployment rate.
“Nevada has every right to be proud of the tremendous growth that most sectors of our state’s economy have experienced over the last year,” said John Guedry, CEO, Bank of Nevada. “As Christopher Thornberg’s thorough presentation made clear at the Bank of Nevada Fall Economic Forum, our state led the nation in employment and GDP growth between June 2017 to June 2018. Much of that can be attributed to increased economic activity in Las Vegas and nationally,” he said.
Tourism remains the dominant force in Southern Nevada. Employment in many subsectors, including Leisure & Hospitality, have now topped pre-recession peaks. This includes the Restaurants & Other Eating Places sector which has grown 35.9 percent since June 2008, now employing 92,800 workers.
Three industries sustained losses in employment between June 2017 and June 2018, including Information, down 7.3 percent, Admin Support down 2.0 percent and Wholesale Trade down 3.5 percent.
Other important findings in the Regional Intelligence Report include:
Construction: The largest-percentage growth of any industry in the region was in Construction, where 5,500 employees were added between June 2017 and June 2018, a 9.2 percent expansion. Even with the increased hiring and activity, Construction accounts for 6.5 percent of the economy’s employment, down from 10 percent in 2008.
Gaming Revenue: As employment and wages grew over the past year, so did Clark County’s gaming revenue. In June 2018, gaming revenue in Clark County grew 3.5 percent, as the monthly total increased to $791 million. Comparing year-to-date figures (January to June) that’s a 3.9 percent increase over 2017. The Las Vegas Strip accounts for the majority of gaming revenues in Clark County. In June 2018, Strip revenue rose 5.4 percent to $524 million.
Taxable Sales: Taxable sales have risen considerably in Clark County, reaching $3.6 billion between May 2017 and May 2018, an 8.2 percent increase. During that time, Food Services & Drinking Places — the largest subgroup for taxable sales — increased 3.9 percent, bringing in $967.6 million.
Residential Real Estate: Home prices in Clark County show no signs of falling. Between May 2017 and May 2018, Zillow shows the median home price increased 15.3 percent to $262,000. Although prices have gone up in Las Vegas, the market remains less expensive than the statewide average of $274,200. Also during May 2017 to May 2018, single-family permits fell 5 percent while multi-family permits increased 79.1 percent which signals a shift toward renting in the region. Rent in Clark County has topped $1,000 per month, a year-over-year gain of 5.4 percent.
Commercial Real Estate: Although employment and business activity have increased in Clark County, the number of establishments has fallen. Overall commercial real estate vacancies have flattened. In the second quarter of 2018, office vacancies rose 0.4 percentage point to 23.2 percent, while retail vacancies increased 0.5 percent to 13.5 percent. However, the cost of rent for both office and retail increased to $25 per square foot for office units and $22.2 per square foot for retail property.
Migration: Clark County continues to attract new residents. Between July 2016 and July 2017, net migration was estimated at 36,625 people. Compared with migration in July 2013, this is a 115 percent increase. Among major metro areas such as Denver, Phoenix and the California Inland Empire, only Phoenix had a higher net migration. Demographic shifts are also at work. In 2016, 17.8 percent of migrants were 55 years and older, an increase of 86.7 percent compared to 2011 (15.6%.)
Household Income: The share of households earning more than $100,000 is on the rise. Between 2011 and 2016, the number of 100K households increased from 18.4 percent to 21.6 percent. By contrast, the proportion of households earning less than $25,000 dropped to 20.8 percent, from 22.2 percent in 2011. The majority of households earn between $25,000 and $50,000, representing 25.6 percent of all households. While the Clark County median household income increased 5.5 percent in 2016 to $54,384, the county still falls short of the national median household income of $57,620.
Further details can be found in the Regional Intelligence Report, prepared by Beacon Economics LLC and presented by Bank of Nevada at the 2018 Fall Economic Forum. To download the entire report, please go to bankofnevada.com
About Bank of Nevada
Bank of Nevada is a division of Western Alliance Bank, Member FDIC, the go-to bank for business in its growing markets. Founded in 1994, Bank of Nevada offers a full spectrum of loan, deposit and treasury management capabilities, plus superior service to meet the needs of local businesses. With 10 offices in Las Vegas, Henderson, North Las Vegas and Mesquite, along with Western Alliance Bank’s powerful array of specialized financial services, the banking division is a valued resource for Southern Nevada’s business, real estate, professional, municipal and nonprofit communities. Western Alliance Bank is the primary subsidiary of Phoenix-based Western Alliance Bancorporation. One of the country’s top-performing banking companies, Western Alliance ranks #2 on the Forbes 2018 “Best Banks in America” list. For more information, visit bankofnevada.com.