There are projections of a looming national recession and yet Andrew Woods of UNLV’s Center for Business and Economic Research projects that Clark County’s population is projected to grow this year by 52,000 people.
Woods told KNPR State of Nevada Host Joe Schoenmann today that 2022 was a story about the resiliency of the American consumer, and 2023 will be about the resiliency of American business.
“We have higher wages, higher business rates, we have cooling demand. We have gluts in surplus. Before we had supply chain snarls,” Woods said. “I think it’s going to be about how does business react to this new economy? We don’t forecast a recession… at this time but we do forecast a cooling of demand and cooling of the economy over the next two years.”
Woods noted that the U.S. economy will continue to grow during this period, which saw 2.1 percent growth in 2022 when compared with 2021 levels. He forecasts a 1 percent economic growth rate this year.
In October, state employment grew by 7,500 jobs, Woods added, noting that “we have more jobs todays than in 2019.”
That said, outside factors such as another variant of COVID or a global political crisis, could throw the U.S. into recession through a significant rise in unemployment, he said, noting that we only have 39 more people in the Southern Nevada workforce today than we had in 2019, making it more difficult for employers to find workers.
“We’re not seeing the prime-age workers move into (the workforce) to fill jobs in the leisure and hospitality industries,” Woods noted, adding that businesses likely will be fighting over workers for years to come, much of this being the result of the ongoing retirement of baby boomers, which will continue through 2030.
Overall, Woods gives the Southern Nevada economy a B-plus, saying that “we’ve weathered” the recent economic downturn. He sees the Southern Nevada benefitting from big-name professional sports events here including The Super Bowl and Formula One racing, although significant issues remain from the availability of water, developable land and a quality workforce, which will remain tight.
“The pandemic pretty much changed the dynamics of the labor market,” added Jon Restrepo of RCG Economics. “I think the bigger issue than a shortage of workers necessarily is workers that don’t want to do certain jobs. There’s a shortage of truckdrivers and folks like that only because there’s preference now, particularly generational of not doing certain types of work, whether it’s construction work… or some of these other trades. So, the issue of people getting into trades and choosing a career is not a thing that’s popular with a large portion of the workforce, particularly with those under 30.”
Restrepo says the 2024 economy will likely be a little tougher and will receive a grade of B “based upon what we’re seeing and hearing.”
Peter Guzman of the Latin Chamber of Commerce says the economic reality for the region’s Hispanic Community is somewhat different.
“We did not see them struggle as much during COVID until they were asked to close their business,” Guzman said. “That’s when they struggled. Before then, after then… the Hispanic entrepreneur is a little different. They have family members working, and if they need more family members there’s usually two, three generations living in a household. If they need employees, it’s usually family members that come and work. So, they can access more labor quicker than non-Hispanic businesses. It’s just the way it is. So, we’re seeing Hispanic businesses thrive.”
Construction firms and restaurants make-up a significant portion of the Latin Chamber of Commerce membership.
Meantime, Paul Anderson, the executive vice president of government and industry affairs for Boyd Gaming noted: “The tough spot in Southern Nevada is you have such an enormous hospitality industry to diversify that it takes a big move to move that needle even just a little bit.”
By comparison, if you look at the Reno environment Apple, Tesla and Amazon were able to enter that market and significantly transform that economy, which Anderson noted now has a thriving technology-based economy.
“It has become much more resilient than it has ever been before,” said Anderson, who’s a former head of the Nevada Governor’s Office of Economic Development. “In Southern Nevada, even if you look at just the hospitality industry, they have diversified in and of themselves. That’s kind of the sports and entertainment piece of the puzzle, where we now have sports. We have the F1 (Las Vegas Grand Prix) coming… which I think is going to be a game changer for us.”
Guests: Peter Guzman, Latin Chamber of Commerce; John Restrepo, principal, RCG Economics; Paul Anderson, served as Governor Brian Sandoval’s Executive Director of the Nevada Governor’s Office of Economic Development; Andrew Woods, UNLV’s Center for Business & Economic Research