By Guest Writer Jeremy Aguero
The last six months have been some of the most challenging on record for Southern Nevada as the COVID-19 pandemic triggered a public health crisis that quickly evolved into an economic crisis. While there is still a great deal of distance between current and pre-pandemic levels, the regional economy has come a long way back from the low points reported in May and June of this year.
Southern Nevada lost 242,000 jobs between February and April, representing the greatest two-month reduction in jobs in Southern Nevada history. In the five months since, the Las Vegas metropolitan area has regained 120,000 of those lost jobs. When employment plummeted, the regional unemployment rate skyrocketed to 34.0 percent, twice as high as any time during the Great Recession, and the highest rate reported in the modern era. That rate, however, has retreated to 14.8 percent as of September, a reflection of businesses reopening and workers getting back on the job.
The trade, transportation and utilities sector has regained 68.8 percent of the 33,000 jobs lost, and the education and health services sector has reported a 67.1 percent recovery, regaining 10,000 of the 15,000 jobs lost. The largest numeric gain was reported in the region’s core leisure and hospitality sector, where 66,000 out of 136,000 lost jobs have been regained.
Another key indicator of the region’s economic health, consumer spending, has improved in recent months, but that improvement has been heavily influenced by more than $20 billion in federal stimulus flowing into Nevada. In August, retail sales in Clark County totaled $3.4 billion, a 14.5 percent decline from the year before but well ahead of the 36.1 percent year-overyear drop reported in April. Among Clark County’s top 10 retail sales categories, significant year-over-year improvements have been reported across three categories. Non-store retailers (e.g., Amazon) more than doubled retail sales over the year, expanding 162.3 percent between August 2019 and August 2020 to $252.4 million. More in-home dining boosted yearover-year spending at food and beverage stores by 14.1 percent in August 2020 to $127.1 million, while building material and garden equipment and supplies sales expanded by 9.1 percent over the year to $156.9 million. While these categories have helped to buoy the retail landscape with their record gains, other large categories have experienced year-over-year declines, including sales at motor vehicle and parts dealers. Food services and drinking places have borne the brunt of the crisis, experiencing a decline of 39.6 percent in August 2020 as compared to August 2019.
BRIGHT SPOT: RESIDENTIAL SALES
A notable bright spot in the local economy has been the residential housing market. Southern Nevada has reported relatively strong sales volumes and rising prices due to a combination of historically low mortgage rates, stimulus funds and the desire to upgrade living spaces where residents are spending more time working, educating and gathering in the age of COVID-19. The supply of existing homes for sale has tightened, resulting in a record median price of an existing home to $337,250, up 8.8 percent for the year. In the new home market, supply and demand continues to rise. New home closings increased 3.3 percent over the year, while new home median closing prices remained roughly unchanged at $389,000, just $3,000 above the level from the prior year.
PATH TO RECOVERY
With nearly a quarter of Las Vegas’ workforce in the leisure and hospitality industry, the recovery path for its economy and the region as a whole will rely on the trajectory of the coronavirus. The development of an effective treatment or vaccine for COVID-19 will be key to determining the recovery timeline, which may extend 18 to 36 months before important visitation segments such as convention attendees and international visitors return to pre-pandemic levels. Southern Nevada’s overall economic recovery has made notable progress to date, but the trajectory and length of the recovery ahead remains full of uncertainty.