Las Vegas stands to suffer more than any other U.S. big city in the coronavirus-related economic downturn.
That dire warning came in a Brookings Institution report that looks at what could be the nation’s hardest-hit communities.
It used data from Moody’s chief economist Mark Zandi who outlined the industries he says will be hurt the most: mining and petroleum production, transportation, employment services, travel arrangements, and leisure and hospitality.
From there Brookings researchers ranked areas where those sectors make up the biggest share of the local economy. High on the list are Sunbelt tourist destinations like Southern Nevada, Orlando, and even Flagstaff, Ariz.
Researcher Robert Maxim said it is not surprising that Las Vegas would be impacted dramatically.
“The reality is you can’t run a casino, a restaurant, a bar, a nightclub without interacting in close proximity and so when the state ordered non-essential businesses, such as casinos, to close I think that was clearly going to have a tremendous ripple effect,” he said.
Maxim said there was no way to sugarcoat the fact that workers in Las Vegas will have some rough times ahead.
“One of the silver linings about Las Vegas though is that there is a relatively high rate of union membership, which should help with some workers as they’re going through this and provide a bit of financial security relative to if they were on their own,” he said.
Maxim said another bright spot is that Congress has taken the situation seriously and the stimulus package it passed could help soften the blow somewhat.
Tourism and gaming are also a portion of the economy in Northern Nevada but not to the same extent as Southern Nevada. Over the years, Reno has moved away from gaming and tourism and brought in more high-tech manufacturing.
“That diversification has given us a solid base to weather this kind of storm because we still have a fair amount of tourism and gaming here but its just a fraction of what it was 10 years ago,” said Mike Kazmierski, president and CEO of the Economic Development Authority of Western Nevada.
Kazmierski said that Panasonic had slowed down its operations in its Reno plant but he said Tesla's Gigafactory and other manufacturers were moving forward.
“Our manufacturing infrastructure, our logistics distribution, all those kinds of operations where you don’t really operate as a group, you don’t have a large assembly of customers, you’re really just working in your piece of the operation separately, those social distancing opportunities allow these companies to continue to function,” he said.
Southern Nevada has worked to improve the diversification of its economy, especially after the Great Recession, while it has worked to some extent, Maxim said this crisis shows the region needs to bring in even more manufacturing and innovation industries.
Robert Maxim, researcher, Brookings Institution; Mike Kazmierski, president and CEO, Economic Development Authority of Western Nevada
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