The 2020 outlook for Las Vegas is extremely optimistic as local experts believe the region will thrive in the year ahead.
Some of the reasons for optimism include a booming construction industry.
Las Vegas is once again experiencing a construction boom. There are some $10 billion in projects set to open over the next two years, including the new MSG Sphere, Allegiant Stadium and the expanded Las Vegas Convention Center.
“The arena project and the sphere project are both complementary projects to our number one industry: gaming and tourism,” said John Guedry, the CEO of Bank of Nevada. “I see that as a positive for us that we’re actually investing in infrastructure that helps us grow our number one industry and I think that’s a good sign for at least the near term.”
Some experts have warned that a recession could happen in the next year or two, but Guedry doesn't believe a downturn is on the horizon.
“We’re not budgeting for slowdown in 2020. We’re actually budgeting an improvement over 2019, which was a very good year for us,” he said.
Guedry said Las Vegas is impacted a lot more by international economies but he believes Europe's economy is recovering, Asia is holding steady and the U.S. is maintaining a record growth pace.
“We’re used to cycles and we try and predict based on length of cycles when the next recession is going to happen.," he said, "I think we should be more focused on what are some of the variables that could either make the economy better or worse, as opposed to, are we headed to a recession or not.”
Guedry isn't alone in his optimism. Christina Roush is the managing principal at Cushman and Wakefield, which is one of the top commercial real estate companies in the valley. She believes Las Vegas is in a very good spot.
“We’re very bullish on the future of Southern Nevada and the development that is happening here,” she said.
Roush said things have changed in Las Vegas, especially since the arrival of professional major league sports.
“The Vegas Golden Knights had a huge effect. That really put us on the map for pro sports. It changed everybody’s perceptions of what could happen,” she said.
Roush said in the past companies looking to acquire office or industrial space in Southern Nevada would reject the area because they felt that it wasn't the right image or they didn't think there would be the workforce they needed.
She said that has changed as the economy has diversified and pro sports teams have called Las Vegas home.
“It’s a situation where now we’re finally a grown-up big city on par with all other cities that have professional sports and the ratification by the NFL is something that was long overdue and probably unexpected by some across the country but we’ve been trying to get a team for a long time," she said, “I think that what it does is really ratifies us as something more than a gaming town.”
Guedry agreed and he believes there is a bonus of sports in Las Vegas.
“I think the added benefit we’re going to receive from this is people will be less apt to want to leave because they start to develop roots here. They have ties to the community that goes beyond just a job,” he said.
He said routing for a team and going to the Smith Center for a show makes the city feel like other cities around the country, meaning people will want to stay for generations.
Roush said the state's efforts to diversify the economy are paying off with higher wages and more companies coming here. She said more tech companies that specialize in gaming technology are finding Las Vegas the perfect place to find a workforce and recruit new workers.
The climate and the lifestyle of Southern Nevada are attracting more workers to higher-paying jobs outside of the traditional service industry jobs.
“The job pool for tech is very attracted to what’s happening here in terms of a change of lifestyle," she said, "So, the employers that are coming here and looking for office space or industrial space, when they speak to us they talk about the job base here and the ability to recruit talent here from other markets.”
There are still outstanding issues that need to be addressed to make the economy work even better for everyone, including affordable housing and education.
“If we’re going to diversify our economy, we’re going to become a city that people want to live and stay in and raise their families in, we have to address the challenges that exist in our education system,” Guedry said.
He said strides are being made to improve education like the opening of the UNLV Medical School and a tax hike by Clark County that is expected to go to pre-k programs.
The issue of affordable housing is a lot more complicated but it something that both Roush and Guedry agreed must be addressed.
“We have to be really looking for solutions so that people can afford to live here in Nevada,” Guedry said.
One of the problems, he pointed out, is the price of land in Southern Nevada is higher. Much of the land in the state is controlled by the federal government, leaving only so much that can be developed.
In addition, several years ago officials voted to put a development ring around the valley, which locks in the boundaries of the city.
Roush said that combined with a spike in prices for labor and materials has led to a jump in housing prices.
There are solutions including more infill in undeveloped land with in the city boundaries and encouraging the redevelopment of older or blighted properties.
“We all want a nice place to live. We all should be entitled to a nice place to live," she said, "If we can redevelop properties and redeploy them in ways that are different then what we were able to do before. We might be able to achieve that.”
John Guedry, CEO, Bank of Nevada; Christina Roush, managing principal, Cushman and Wakefield