LAS VEGAS RESEARCH - DATA

LAS VEGAS RESEARCH

The Unbearable Lateness of Data.

Data lags, unfortunately, showing us not only the past, rather than the future – which is what we really want – but the past from a couple months ago. In a year when things are moving fast, that’s a hard pill to swallow. Nonetheless, the data that we have is beginning to paint a picture of the transition from recession to recovery in 2020.

John Matt Stater

Research & GIS Manager, SW Las Vegas john.stater@colliers.com

Employment Numbers July employment numbers were just released, and they do not tell the tale we wanted. While June numbers showed a sharp spike upwards, showing people going back to work as retail and hospitality opened up in the Valley, the July numbers were, compared to June, fairly flat. Southern Nevada got about half the jobs it lost back, and growth rates in July suggest that getting the other half back will take some serious time. On a year-over-year basis, only four sectors – Government, Financial Activities, Construction and Natural Resources & Mining – showed job gains, and those gains were not impressive. The Leisure & Hospitality sector is still down 74,100 jobs. Professional & Business Services is down 25,100 jobs year-over-year, followed by Retail down 10,500 jobs. It is notable that Transportation & Warehousing is down 5,300 jobs, with most – but not all – being in passenger transportation.

Hinging on Hospitality Southern Nevada’s economy hinges on hospitality, and we have some post-closure numbers there that are sobering. Compared to one year ago, June saw visitor volume down 70.5%, gaming revenue down 51.4%, convention attendance down 100%, airport passengers down 76.6% and room occupancy down 50.8% with 36.2% fewer rooms on the market. July numbers have not yet been released, but from the stories I am seeing in the press, I am expecting numbers very similar to June’s. Until the hospitality sector can kick it into high gear, the Valley economy as a whole is going to be in trouble.

Silver Linings If we have any silver linings to speak of, they come from the housing sector. New home sales were up 10.7% year-over-year in June, and existing home sales were up 5.3% in July. Residential permits were down 19.4% in June. To sum up, one or two months ago, the postbusiness closure bounce seemed to level off, giving Southern Nevada’s economic recovery a potentially tough road ahead. The Wall Street Journal, on August 24th, published a piece titled “New Thinking on Covid Lockdowns: They’re Overly Blunt and Costly; Blanket business shutdowns—which the U.S. never tried before this pandemic—led to a deep recession. Economists and health experts say there may be a better way”, to which I can only respond, “No duh!” In the 19th century, economic recessions were often called “panics”…

I think we can say the same for the 21st century. We just scared ourselves out of two or three years of growth, and until the economy is fully re-opened, will probably have to claw those lost jobs back slowly.

But hey – cheer up… it’s finally election season! That will be fun, right?

Employment Trends

(Employment in tracked Commercial Real Estate)