april 19, 2013 s outhern n evada e conomy: r eset... r ebuild... r ecover prepared by:
TRANSCRIPT
April 19, 2
013
SOUTHERN NEVADA ECONOMY:
RESET. . . REBUILD . . .
RECOVER
Prepared by:
RESET
3
The ugliest chart, ever.This is NOT your father’s recession.
Source: U.S. Bureau of Labor Statistics. Indexed by RCG.
Nevada Recovery Comparison of Last 11 Recessions (1948 – 2007)% Job Losses Compared to Peak Job Month
Current Jobs Recession-NV
4
6
8
10
12
14
16
18
20
22
24
Q4/08
Q1/09
Q2/09
Q3/09
Q4/09
Q1/10
Q2/10
Q3/10
Q4/10
Q1/11
Q2/11
Q3/11
Q4/11
Q1/12
Q2/12
Q3/12
Q4/12
% R
ate
The “real” unemployment rate - beyond the official rate.
Note: Rates are at a 4-quarter moving-average basis. Source: U.S. Bureau of Labor Statistics.
U3 = Official unemployment rate - 11.0%
U6 = U3 + All Marginally Attached + Part-time Workers - 20.3%U5 = U3 + Discouraged + All Other Marginally Attached Workers-13.3U4 = U3 + Discouraged Workers- 11.9%
Alternative Measures of the Nevada Unemployment Rate: 2008 - 2012
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REBUILD
Resort Industr
y
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Clark County Non-Farm Employment & Visitation Growth (%): 2003 - 2013
-15%
-10%
-5%
0%
5%
10%
Employment (Feb/12 - Feb/13) = +16,000 jobs)Visitor Volume (Feb/13 = 3.3 M visitors)
The moderate return of visitor & job growth.
Sources: U.S. Bureau of Labor Statistics; Las Vegas Conventions & Visitors Authority.
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Las Vegas remains a strong player in global gaming resort market. But is it still “Mecca”?
Source: Nevada Gaming Control Board.
Clark County Gaming Revenue: 2003 – 2013
Net Baccarat
GGR
8
Leisure & Hosp.’s improving operating environment.
Healthy increases in avg. daily room rates.
Clark County Hotel Revenue Per Available Room (RevPAR*): 2005 - 2013
* RevPAR = average daily room rate x occupancy rate. Source: Las Vegas Convention and Visitors Authority. Calculated by RCG.
$50
$75
$100
$125
$150
Feb-
05
Feb-
06
Feb-
07
Feb-
08
Feb-
09
Feb-
10
Feb-
11
Feb-
12
Feb-
13
RevPAR
12-Month Moving Average
9
Consumer spending slowly returning. How sustainable?
Source: Nevada Department of Taxation.
Clark County Taxable Sales (12-Mo. Moving Average): 2003 – 2013
$1.5
$2.0
$2.5
$3.0
$3.5
Feb-
03
Feb-
04
Feb-
05
Feb-
06
Feb-
07
Feb-
08
Feb-
09
Feb-
10
Feb-
11
Feb-
12
Feb-
13
12MMA
10
REBUILDJob
Market
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Private jobs growing at a moderate pace, but government jobs continue to lag.
Source: U.S. Bureau of Labor Statistics.
Clark County Public & Private Employment Growth (#): 2003 - 2013
-100,000
-75,000
-50,000
-25,000
0
25,000
50,000
75,000
YoY E
mplo
yment C
hange
Public Emp. Ch. (Feb/12-Feb/13 = +1,600)
Private Emp. Ch. (Feb/12-Feb/13 = +14,400)
12 *Based on Clark County's employment-to-workforce ratio (Nevada Department of Employment, Training and Rehabilitation). Indexed to a baseline of 100 in December 1998.
The Stair Climb Return
RCG Clark County & US Job Index*: 2000 - 2013
88
90
92
94
96
98
100
102
Feb-
00
Feb-
01
Feb-
02
Feb-
03
Feb-
04
Feb-
05
Feb-
06
Feb-
07
Feb-
08
Feb-
09
Feb-
10
Feb-
11
Feb-
12
Feb-
13
Clark County
US
Clark County
February 2013 = 93.7
2012 Annual avg. = 92.2
2000 - 2012 avg. = 96.1 2000 - 2007 avg. = 98.7
2008 - 2012 avg. = 91.8
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Diversified or Not? Southern NV’s Economy
12.3% 11.8% 12.1% 12.8%17.4% 16.8% 16.4% 16.4%
3.1% 2.9% 3.0% 3.2%
3.9% 4.2% 4.0% 4.1%
34.8% 34.1% 32.1% 34.9%
8.4% 9.0% 9.5% 10.0%
6.9% 7.2% 7.7%9.8%
11.1% 12.7% 13.6% 15.4%
4.1% 4.3% 4.6%4.3%
10.2%12.1% 13.0%
13.4%
6.3% 6.2% 5.7%5.5%
6.1%6.2% 6.1%
5.9%
18.9% 18.8% 19.1%
20.5%
20.4%19.6% 19.5% 19.3%
3.2% 3.1% 3.1%
2.7%
15.4% 11.5% 10.0% 8.9%8.5% 10.1% 11.3%
5.0% 3.9% 4.9% 5.2% 4.0%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1993 2003 2008 2013 1993 2003 2008 2013
Natural Res.
Construction
Manufacturing
Trade/Trans./Util.
Information
Financial Act.
Prof. & Business
Educ. & Health
Leisure & Hosp.
Other Services
Government
Clark County U.S.
Source: U.S. Bureau of Labor Statistics. Analyzed by RCG.
Employment Distribution by Industry
14
Nat. Res./Mining, 0.1, 300
Constr., 1.2, 37,400
Manuf., 0.3, 20,000
Trade/Trans./Util., 1.1, 154,200
Inform., 0.6, 9,600
Financial, 0.9, 41,600
Prof./Bus., 0.3, 32,300
Educ./Health, 0.6, 73,700
Leis./Hosp., 3.5, 262,000
Other, 0.8, 23,700
Gov., 0.8, 96,1000.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
-50% -30% -10% 10% 30%
LQ (2
013)
% Change in LQ (2003 - 2013)
14 Note: The first value by each industry is the LQ for that industry; the second value is the number of employees in that industry in 2013. Source: U.S. Bureau of Labor Statistics. Analyzed by RCG.
Diversified or Not?, cont’d: Location QuotientsSouthern NV’s Economy, Last 10 Years
Mature sectors that are losing ground
Mature, healthy sectors
Sectors that need attention
Potential up-and-coming sectors
15
$819
$841
$822
$900
$947$937
$775
$825
$875
$925
$975 Clark County
US
S. Nevada has competitive but relatively low wages. Avg. weekly wage below the U.S. average.
Source: U.S. Bureau of Labor Statistics. Calculated by RCG.
10% above Clark
14%
Clark County & US Average Weekly Wages – Adjusted in 2012 $
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REBUILD
Real Estate
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$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
0
0
0
0
0
1
1
1
1
1
1
New Home
Resale Home
Both types
Median Home Prices*: 2003 - 2013
* All product types, including hi-rises. Sources: Home Builders Research; MLS.
Southern Nevada’s new housing market has stabilized & improved over the past 12 months.
18Sources: Various local entities; Center For Business & Economic Research at UNLV.
Commercial permitting values have finally hit a bottom & continues to stabilize.
Clark County Annualized Commercial Permit Valuation: 2003 - 2013
12-Month Moving Totals
$0
$250,000,000
$500,000,000
$750,000,000
$1,000,000,000
$1,250,000,000
$1,500,000,000
$1,750,000,000
$2,000,000,000
$2,250,000,000
$2,500,000,000
$2,750,000,000
12-Month Total ending Feb/2013:
$196.5 M
19
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
Q4 '07 Q4 '08 Q4 '09 Q4 '10 Q4'11 Q4 '12$0.00
$0.10
$0.20
$0.30
$0.40
$0.50
$0.60
$0.70
$0.80
$0.90
Vacancy (%)
Asking Rents ($ PSF/Mo.)
Industrial Vacancy & Asking Rents: 2007 - 2012
Sources: RCG Economics.
The Industrial market continues to bump along the bottom with stable but high vacancies.
20
0%
5%
10%
15%
20%
25%
Q4 '07 Q4 '08 Q4 '09 Q4 '10 Q4 '11 Q4'12$1.50
$2.00
$2.50
$3.00
Vacancy (%)
Asking Rents ($ PSF/Mo.)
Spec Office Vacancy & Asking Rents: 2007 - 2012
Source: RCG Economics.
The office market made some headway in 2012 & continues to stabilize with high vacancy.
21
0%
2%
4%
6%
8%
10%
12%
14%
Q4 '07 Q4 '08 Q4 '09 Q4 '10 Q4 '11 Q4 '12
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
Vacancy (%)
Asking Rents ($ PSF/Mo.)
Sources: RCG Economics.
Anchored Retail Vacancy & Asking Rents: 2007 - 2012
The anchored retail market is the most improved,because of improving taxable retail sales.
RECOVER
23
Realism vs. Fantasy
• Relentless Pragmatism & Creativity Are Key
• Real Economic Development
• Learning From Others
• Making Necessary Investments
• True Public-Private Partnerships
• Focus On Our True Assets
Southern Nevada’s MOST
IMPORTANT Asset
25
Everyone In This Room
Questions