“In 2025, Nevada was tall on fear and short on facts,” said Brian Bonnenfant, director of the University of Nevada, Reno Center for Regional Studies. “In 2026, I see more uncertainty.”
Bonnenfant is one of Nevada’s data experts forecasting a not-so-bright future – dependent on how and when Nevada businesses react.
That being said, not all of Nevada is in a downturn.
“Taxable sales in Clark County have grown almost two percent, but across the state, it’s an average of six percent growth,” Bonnenfant said. “Northern Nevada is leading the state when it comes to diversification.”
It’s the first time in Bonnenfant’s 30-year tenure that he’s seen Clark County not leading the state’s economic growth.
“Usually, if Clark is down, the state is down,” he said. “That’s just not the case anymore.”
Bonnenfant said the top industries in Nevada in 2025 were merchandising and retail, wholesale, manufacturing, and technical services.
“Usually, with Clark County, our top 20 list is dominated by leisure and hospitality,” he said. “This year, manufacturing industries started to pop up.”
Other industries from up north, like logistics, are also starting to creep in.
“It’s a direct result of the work that’s happening in Washoe County and surrounding areas,” Bonnenfant said. “These new plants and company relocations that are boosting the northern Nevada economy where there was not that much activity before is spreading.”
Story, Lyon, Douglas, and Lincoln counties dove headfirst into diversification efforts as well, Bonnenfant said.
“It’s a whole region benefiting from this growth,” he said. “There are three economic areas in Nevada: the northwest, where we now see advanced manufacturing and logistics; the northeast with agriculture and mining; and the south with leisure and hospitality.”
Bonnenfant said both the northwest and northeast have added at least one new industry in the past few years.
“Clark County has not,” he said. “The south has really struggled to diversify.”
Tourism Slumps
“Leisure and hospitality make for a transient population,” Bonnenfant explained. “That can make community building and consistent jobs more difficult.”
Making more resilient communities are a focus for Andrew Woods as the director of the University of Nevada, Las Vegas Center for Business and Economic Research (CBER).
“I think economic growth and diversification are distinct things,” Woods said. “Both contribute to resilience, but in different ways.”
A “diverse” economy is not always a successful one, Woods said. Specialization can be perfectly fine if the specialization is “more productive.”
“Las Vegas is the second least diversified metro compared to anywhere else in the nation,” Woods said. “The first is Silicon Valley, a very different economy, certainly with its own share of issues related to affordability and accessibility, but which is a much more productive place than Vegas now, with technology as a leading industry.”
Woods said Las Vegas was too trusting of “revenge travel” post-pandemic, keeping prices high and assuming visitors would always pay a premium.
“Our resorts stock is great because they’re playing to an affluent customer, but not everyone can do that,” Woods said. “We need to figure out how to create value for a customer in a lower tax bracket, who can’t feel like they’re being nickeled and dimed.”
Woods said he remains “cautiously pessimistic.”
“I don’t think the summer slump of 2025 will continue into 2026,” he said. “There is still cause for concern – domestic travel was up for Orlando and Hawaii, whose pricing strategies are just different than ours. I think we’re adjusting.”
But the problem extends beyond just a slump in tourism.
The Local Scene
Other tourism-driven communities like Nashville, or New Orleans, have internal infrastructure that supports the local community. “That’s something Las Vegas is behind on,” Woods said.
The biggest industry is healthcare. “I look at the demand for healthcare, and even if we do nothing, make no new investments, it’s going to be our second largest industry by employment in the next year and a half,” he said. “We’re forecasting that the demand is going to be there. If we wanted to just catch up to the national average, we’d need 50,000 more jobs in addition to what will be naturally created.”
As it’s trending, the state can’t – and won’t be able to – support that need.
“We all know the joke that if you want to get good healthcare, you need to get on an airplane,” he said. For a while, that was true for Nevada.
“Testing went to California, and for our organ donations, there’s not always enough space here – a lot of that is stored elsewhere,” Woods said. “We’re very reliant on Utah and Arizona.”
Woods proposed a major cancer center in the valley, along with sports health centers.
“Someone has to take the risk and build these things,” he said. “Align our strengths with hospitality and medicine.”
Whatever the development is, Woods says it needs to be big and soon.
“When we study northern success, they got big wins – like Tesla – which then brought in a bunch of other manufacturers and startups that spun off into whole ecosystems which could expand on their own,” he said. “That’s why these communities have rebounded so much faster than southern Nevada.”
A “big win” for southern Nevada is an employer with 3,000 jobs, that then bring in suppliers and other support with 10,000 or more jobs.
“We’ve taken the long-term approach with water, transportation and energy – we know southern Nevada can do this,” he said. “But for industry, it feels like if we can’t get it built overnight, we might as well not bother. That’s hurting us. It can be healthcare, or information technology, or manufacturing, but we must do something and soon.”
The Cost of Skill Development
Getting skilled workers to take or launch these jobs has also been an uphill battle – and may continue through 2026.
“Nevada ranks near the bottom nationally when it comes to education,” said Byron Brooks, chair of the Nevada System of Higher Education (NSHE). “The number of bachelor’s degrees and student completion rates [indicate] we’ve not been competitive.”
This is in the face of an impending “enrollment cliff” for Nevada’s institutions, which would mean a big drop-off in applicants, and, in return, money for higher education.
“This isn’t a Nevada-specific problem, but when we look at our state’s public-facing institutions, they stand to lose a lot,” Brooks said. “There are a lot of options for students to go to school in our state and online from other states. We must make a more compelling value proposition to potential students than ever: how do we make things less constrictive?”
Brooks said the state must take the return on investment for higher education more seriously.
“It could mean a few classes to get a certification so you can move up at your current job – that’s part of higher education, too,” he said. “We have outstanding R1 institutions, but we also need to look at what access looks like for students who are not ready for or are not interested in a large campus.” (An R1 institution is classified as one with very high research activity.)
Over 300,000 residents of Nevada have some college, but no degree. They are the kind of student who may be more interested in piecemeal learning or specific coursework.
“It’s in our interest as a system to speak to those folks and ensure that anyone in the adult learner category has a clear pathway to coming back and finishing up,” Brooks said.
Woods calls the local focus a reckoning. “There’s a promise to hire locals, but then, have you trained locals and given them the skills to succeed?” he said.
A Facelift for Course Offerings
Nevada’s higher education institutions are bracing for impact – primarily in course catalogs.
“We are working to transition into a diversified, innovation-driven economy,” Brooks said. “In practice, this means updating our programs to be part of emerging fields: renewable energy, autonomous technology, biotech, and advanced logics – we’re now preparing students for these industries, whether they’re booming now or will be soon – to ensure our students are competitive in the national and global workforce.”
Nevadans have seen this directly with Tesla. “When Tesla moved here, they really pushed on certification programs,” Bonnenfant said. “Advanced manufacturing, 3D printing, AI, it’s all big – we need kids to learn this stuff before they get out into the workforce, and as a state, we’ve delivered on that.”
The course offering updates go down into K-12. “It’s pushed earlier education into addressing the needs of the century,” Bonnenfant said.
Career and technical education (CTE) efforts in partnership with higher education institutions like UNR and UNLV in the state have also buoyed K-12 programs.
“Economic strength in the next decade relies upon how well higher education connects students to the jobs of the future,” he said.
All of this relies on public higher education’s main funding source: the government.
“When the state funds higher education adequately, student debt declines,” he said.
“We had a significant budget deficit from the last governor’s administration, and when Governor Sandoval, came in, he restored those budgets to ensure that, for public higher education, we had a cost-of-living adjustment for faculty.”
While this effort succeeded in supporting faculty retention, Brooks said it also put more pressure on the already tenuous higher education budgets.
“It did negatively impact the financial outlook of our institutions,” he said. “The concept was absolutely fantastic, but unfortunately, restoring that budget wasn’t enough when it comes to supporting faculty. We’re still needing additional funding.”
There’s particular pressure from the federal government, Brooks said.
“There are increased uncertainties with grants and research from federal funding as well, which puts us at a disadvantage when it comes to cost.”
That additional capital is going to come from fees, Brooks said. “We continue to try and address costs and affordability, but there is a very real pressure for an increase in fees – we plan to take a holistic approach,” he said.
“Holistic” fees will likely impact tuition first. In response, Brooks said NSHE is gearing up outside financers of scholarships and other educational funding support.
Access to more paid internships, college rate for prior or on-the-job learning, and work-based learning are all new or enhanced programs aimed at non-traditional students. Brooks said Nevada’s higher education institutions have also put new focus on advising.
“In the last couple of years, we’ve been increasingly more intentional about scheduling for students,” he said. “The best experience on campus includes strong academic guidance that advises students entering school to have a clear path and know that the courses they’re taking align with the [career] they’re studying for.”
This is part of a bigger financial literacy initiative to keep students from being saddled with loans.
“When students can finish their education on time without the reliance of thousands in debt, it leads to more sustainable choices, and, in turn, a healthier economy,” he said. “With smaller or no loan burdens, students can go into the industries they choose and spend more freely – we’re all more competitive this way.”
Sunsetting Pandemic Legislation
It’s not just education that’s facing fee increases – 2026 is likely to bring higher tax rates, too.
“Unfortunately, we’re at the end of a strong, 12-year-long economic cycle,” Bonnenfant speculated. “I think the bookend was the stimulus-fueled, overheated economy post-COVID.”
Nevada received millions in funding from the federal government during this time – money that Bonnenfant said was, at least in part, mismanaged.
“Local, state, and federal leaders did a really bad job on rainy day funding and understanding that this [cash inflow] was temporary funds,” he said. “So much was stood up – especially salary increases – on [this funding] that is set to sunset at the end of 2026.”
Now, Bonnenfant said the state is going into a “contraction era.”
“Local governments and school districts, they’re broke,” Bonnenfant said. “What happens when we need money? Either cuts or increased taxes and fees. We’ve already seen an increase, and from the data, I think that will continue.”
Bonnenfant points to the City of Reno sewer rate fee that has gone into effect for the next two years: an eight percent increase on the standard charge for any sewer hookup.
“That’s just one component – there are so many other issues that I expect to see increases on, whether it be wastewater, police, fire, roads, or something else. We’re going to be seeing local governments do a lot of gymnastics on fees and taxes, lobbying and talking to state politicians to see what we can do with the Nevada tax structure.”
Bonnenfant doesn’t see a positive spin when it comes to taxation in 2026 and even further into the future.
“Ultimately when it comes to taxes and fees, we’re just trying to squeeze more lemon juice out of our turnip,” he said. “The next legislative session will be big for our state.”
Nevada’s Battle for Housing
“We’ve had a seven percent mortgage rate for three years,” Bonnenfant said. “With this, existing home sales have slightly bumped up compared to the last three years, but we’re really dog paddling along on the new construction side.”
Cost increases to materials haven’t U-turned yet – and they may never – which has fed into smaller, more expensive new homes.
“The data doesn’t have this trend getting any better… not until those mortgage rates come down and wages increase,” Bonnenfant said.
In southern Nevada, the story is similar. “Median listing prices for homes in Las Vegas have gone up 50 percent since 2018,” Woods said.
He credits the “wealth effect” – people moving from out of state who sold their more expensive homes for a profit and then flood the comparably affordable Nevada market with equity – a trend that’s likely to continue.
Those downer data points are only for home ownership though. Bonnenfant said on the rental side, both for residential and commercial, there’s been much more progress.
“Rents are stabilizing,” he said. “The question there is about supply for the demand.”
Multifamily housing and flex industrial are the big trends for residential and commercial real estate, respectively, in response to the need for space.
“It’s all about flexibility,” Bonnenfant said. “Using spaces for more than one purpose, or for more than one family, has been successful for both builders and landlords.”
Taking Action
“When uncertainty is the driver, there’s no investment,” Bonnenfant said. “Still, I constantly hear echo chambers daily of how bad it is. Yes, it’s bad – it’s been this bad since 2022. We’re not in a recession. We’re not there yet. There is still an opportunity to correct the course.”
It’s all in risk taking, Woods said.
“We need people to be brave,” he said. “Almost half of our businesses in Nevada right now were created during or after the pandemic – and they’re still in operation. I’m hoping to see them pivot and grow and expand, maybe even foster these new industries we really need.”
Bonnenfant concurred with the need for someone to take the wheel.
“Our workforce is short, our housing is short – yes, that’s all true,” Bonnenfant said. “But what these booming companies are after now – land, data centers, energy – we have. We can be in that sandbox.”
