If it weren’t for gross domestic product, we could take away the UNLV Center for Business & Economic Research’s “cautiously,” and just leave it “optimistic.” Unfortunately, in the first quarter of this year, U.S. real GDP saw its first significant year-over-year drop in three years. Fortunately, the main indicators that predict recession say we’re safe from that recurring nightmare — at least for the foreseeable future.
Such was the seesawing rhythm of the 2014 economic outlook, delivered this morning at the Venetian/Palazzo by CBER Director Stephen Brown. There was mostly good news — a little bad — and the whole thing ended not so much on a positive note as on the promise of a positive note … coming soon.
Here’s your guide to celebrating, sulking and simply biding your time, based on Brown’s analysis.
UP
Real private investment: By the end of the year, the country’s businesses and individuals will again be investing prerecession levels.
Industrial production: U.S. firms are now pushing out product faster than before the recession.
Jobs: Both Las Vegas and Nevada overall have been steadily adding jobs since 2011, and should continue to do so through 2015.
Home values: Las Vegas house prices have risen 44.8 percent since hitting rock bottom in 2012. With less than six months of listed supply on the market, we can expect values to keep going up.
Tourism: Las Vegas visitor volume in March was its highest ever for that month.
“The closer you are to the Strip, the larger the share of growth in visitor volume you get,” Brown said.
DOWN
U.S. economic certainty: Brown blames turmoil in Washington, D.C., for ongoing angst about the country’s financial future.
Local housing starts: To be fair, the 48.9 percent growth of 2012 was an anomaly, but it sure makes the projected 12 percent of growth of 2015 look puny.
Negative home equity: Nevada is still first in this bad class, although we’ve lessened the pain a bit, dropping from 70 percent of homeowners being underwater in 2009 to 30 percent today.
Gaming revenue: It’s fair-to-middling, but the bad news is, local growth in gaming hasn’t caught up with national growth.
“What we’re seeing,” Brown said, “is a little competition from other parts of the country and world.”
SOMEWHERE IN BETWEEN
Global economy: Most of Europe’s in recession and Asian economies are sluggish, but the International Monetary Fund expects world economic activity to pick up by the end 2015.
U.S. real GDP: It should reach 3 percent by the end of this year. Although a strong number, that’s 4.3 percent below potential.
Employment: U.S. unemployment is expected to stabilize at 5.6 percent sometime next year; meanwhile, Nevada has the second-highest unemployment rate in the nation.
Visitors ’ rooms: Visitor volume is rising, but hasn’t caught up with the room inventory, and probably won’t with more new rooms coming online.
“How does it all add up?” Brown asked, answering, “We’re on the cusp of an acceleration.”
