While many business leaders think a recession is imminent, economic forecasts show a slight slowdown in Southern Nevada’s economy over the next 6-12 months. That’s the main takeaway from the Fall Economic Outlook report released today by UNLV’s Center for Business and Economic Research (CBER).
The CBER team says the early recovery from the epidemic looks like a “V” recovery. Since the recovery, Nevada has experienced two expansions followed by two freezes or partial recessions. This resulted in increased “broken-V” recovery.
Most of the entertainment and hospitality trends have been in the negative for the past few months, according to CBER economists. They say that the two-thirds decline in real GDP growth in the first two quarters of 2022 was a false signal. Now, however, events at the national and local levels question the continued economic growth of southern Nevada.
“We are not over the recession yet,” said Andrew Woods, director of CBER. “But a recession is on the cards for 2023.”
The report and subsequent analysis of the local, state, and national economy was shared on Nov. 17 at CBER’s Fall Outlook conference at the UNLV Thomas & Mack Center’s Strip View Pavilion. The event also included discussions on economic diversity and the clean energy sector in Southern Nevada.
While personal incomes and the overall population remain healthy and unaffected by the recession, the biggest threat to Nevada’s economy right now is that the Federal Open Market Committee will be tighter and longer.
“It’s better for the Federal Reserve to fight the devil they know, inflation, than the devil they don’t know, recession or recession over time when higher interest rates go up with money,” Woods said. “Inflation is a major concern and the Fed continues to have the flexibility to use funds and a stable labor market gives them the means to continue raising interest rates.”
Key Features of the Southern Nevada Economy
- Unemployment is stable as of October 2022 at 4.6 percent.
- According to the Southern Nevada Business Survey conducted in September, 84% of respondents said they believe the Federal Reserve’s actions will lead to a recession. Almost half (45.9%) of respondents indicated that we are already in a financial crisis, and several respondents chose 2023 as the next economic year (31.1%).
- Nevada’s economy and its tourism sector may experience a slowdown or recession in 2023 and 2024, although the impact may be mitigated by the resumption of business travel and the preparation of major events such as Formula One or the Super Bowl.
- The Nevada Gaming Control report showed that total gaming winnings were $1.249 billion in September 2022, 7.86% more than last year at the same time.
- CBER predicts that the number of visitors and the total income of sports will decrease slightly in 2023 (-0.6 and -1.1, respectively) and 2024 (-3.9 and -1.5, respectively), but the unemployment rate is expected to be stable at about 4.9% in 2023 if employers. they may be reluctant to let workers go.
- Nevada’s housing market is also expected to take part in the economic slowdown as home prices are expected to decline by 10.7% in 2023 due to rising mortgage rates. Home permits are expected to decrease significantly in 2022 and 2024.
CBER Outlook Report
CBER’s two-part Outlook report predicts the economic outlook for the US and Nevada. Data is compiled from government agencies, sports, and tourism and analyzed to predict local and national economic performance.