Business Indicators - October 2002

Business Indicators

by R. Keith Schwer

Amid a collection of indicators that seem to give mixed signals, Nevada and the nation continue to rebound from the 2001 recession and the aftermath of Sept. 11, though things still have not fully recovered. Most significantly, unemployment rates, while above the desired 4 percent range of late 2000, nonetheless improved in recent months for Nevada, Clark County and the U.S., giving some hope for future growth. Washoe County continues to enjoy favorable labor conditions, with its most recent unemployment rate at 4.4 percent.

Nevada’s taxable sales and gaming revenue collections – measures of overall business activity and indicators of public revenue collections – remain below year-ago levels. With collections failing to return to past levels, state fiscal affairs have deteriorated.

Taxable sales, down 1.7 percent, and gaming revenue, down 8 percent, have been largely responsible for a pronounced deterioration in the state’s fiscal condition. Nevada joins more than 40 other states facing fiscal hardship in 2003.

Nevada’s longer-term economic outlook, though clouded with uncertainties, does point to expansion. Following a sustained period of growth in its major industries, recent construction and investment expenditures have been more restrained. Generally, people have found more to fret about. As a result, the spending needed to rekindle and sustain a stronger recovery has not been forthcoming. Still, even during the recent slowdown, Nevada continues to mark time, waiting for business investment spending to improve and push the recovery into a more rapid pace.