The data continue to tell the story of an economic recession, or more stated differently—“No Toto, we are not in Kansas.” In short, Nevada no longer enjoys the benefits of growth and its citizens finds themselves grappling with the economic hardships of the worst recession since the 1930s.
Looking at year-ago percentage changes, one sees a clear pattern—negative signs for almost all variables. Only a zero percentage change for gasoline sales for Washoe County broke the string of declining trends. Also, we find the unemployment rate for Nevada, Clark County (Las Vegas), and Washoe County (Reno) continuing to trend upward, a case in which a positive change is bad.
The recent changes, measured as month-to-month, offer some encouragement, however. That is, the changes for the indicators as a whole are less dramatic—offering hope of an end in the decline and perhaps some glimpses of improvement ahead. For example, air passengers and visitor volume are up for Reno and down slightly for Las Vegas, less than what we see over the longer-time horizon. These month-to-month comparisons are not seasonally adjusted. Still, we see better performance for the months of the second quarter than during the turbulent first quarter.
Construction continues to decline. Funding and projects have become scarce, to be sure. It looks like federal government construction funding from the stimulus package will be needed to keep this important Nevada economic sector from falling further. It seems clear that construction will be slimming down with this recession and will remain so for so time as growth prospects seem more measured for the future.
Prospects for the Silver State remain tied to one of the weaker sectors of the national economy—consumer spending on discretionary travel and tourism. Other big-ticket items show similar stress in this recession. Housing starts and auto and truck sales are down 45.8 and 30.4 percent, respectively. Recent movements have shown positive signs, however. To be sure, some rise in housing starts is expected given the building cycle in northern climates. And, following the rescue package for GM and Chrysler, attractive prices have brought those with cash and readily available financing into showrooms and have brought some help to this beleaguered industry.
For Nevada’s economy, such direct means of support are not available. In the end, however, a product or service that passes the test of the market, that is, people are willing to spend for it, offers the best hope for Nevada’s prosperiity.
