The latest CRE Recovery Index numbers (for July 2012) show Southern Nevada making a sidestep. If only inconstancy was a virtue!
After taking a dive between July 2011 and June 2012, the index has been taking a bumpy ride. Though movement has generally been positive, it has show stops and starts, and in July 2012 has taken a decisive step sideways.
Unfortunately, this is a pretty good representation of how CRE has felt in Southern Nevada over the past 12 months. It's been tough to get one's feet beneath them and traction is sadly lacking. The employment is not altogether positive, nor altogether negative ...
The slope looks vaguely positive (if you squint your eyes and cock your head to the side), but what we're really looking at is an job market that simply is stuck in neutral. The looming November elections will probably do nothing to help this situation, as business owners hunker down to wait things out and see what 2013-2016 might hold in terms of taxes and regulations.
Perhaps more important is the New Residents Index. Population was always a major growth factor for the local economy, not only in the way that it drove the construction industry, but just in the way it brought people (many of them seniors with built-in incomes) into the region to spend money in grocery stores, locals casinos, department stores, etc. Population in Southern Nevada suffered its first reverse in 30+ years during the Great Recession, and has been flat for the last few years. Greater in-migration could go a long way in curing the region's economic ills.
Visitor volume has generally been improving, and for the most part has reached pre-recession levels. These numbers only really matter if they impact Gaming Revenue and Taxable Sales ...
Fortunately, Taxable Sales appears to be an upward trajectory, though it is a gentle slope and given to some ups and downs. Gaming Revenue, on the other hand, is a more mixed picture. By and large, it appears to be as flat as employment growth, with a Chinese New Year spike earlier this year that has settled back down again as the year has worn on.
So - a mixed picture that is made more worrisome by the mixed picture that is emerging globally. It is unlikely that the second half of 2012 is going to produce the growth the economy needs, and at this point, 2013 isn't looking to be as dynamic as we would like. Hunker down, ladies and gentlemen.