Business Indicators - January 2006

Business Indicators

by R. Keith Schwer

Hurricane season brought loss of life, devastation and economic disruption to the Gulf States. Though this region produces only about 2 percent of the national output, the region is rich in energy. As such, energy-supply disruptions loomed large and shortages appeared immediately. Prices jumped, but quickly receded as oil was released from the national reserve, supplies were supplemented from other sources and the public cut back on usage.

The hurricane-induced shocks have not derailed the U.S. economy, causing only a slight slowing, and they didn’t make a measurable impact on the robust Nevada economy.

U.S. job growth remains modest, up 1.4 percent on an annual basis, whereas conditions in the Silver State continue along a record pace, up 6.1, 7.4 and 4.0 percent annually for Nevada, Clark County and Washoe County, respectively. Such differences reflect both shifting regional and industrial adjustments. For example, the "Big Three" U.S. automakers continue to downsize, leaving the manufacturing Midwest region with job losses. Meanwhile, Nevada continues to offer excellent job prospects across a range of opportunities.

Travel and tourism, construction and mining (Nevada’s big three industries) continue to prosper. Nevada’s gaming revenue is up 9.6 percent on an annual basis. Taxable sales are sustaining robust growth, up 9.8, 8.9 and 8.5 percent year-over-year for Nevada, Clark County and Washoe County, respectively. Construction jobs continue to increase, with expectations of further growth. Permitting activity, the first step in a construction program (whether residential or commercial), is up on an annual basis for Clark County and mixed for Washoe County (down for residential, but up for commercial).

Rising commodity prices have improved the financial prospects for mining, as gold prices are near $500 per ounce. The year ahead looks bright for Nevada and its three key regions: Las Vegas, Reno and rural Nevada.