Thanks to a focus on a diversified economy over the years, Greater Reno-Sparks is leading the charge to a post-pandemic recovery, officials say.
When the coronavirus pandemic sent the U.S. economy crashing last spring, no state was hit harder than Nevada. With COVID shuttering casinos and resorts for months, halting the hospitality and tourism industries, Nevada saw its unemployment rate skyrocket to 28% in April. It was the worst-ever unemployment rate in state history and highest mark in the country.
This set the stage for Nevada’s economy to decline a nation-high 42.2% in the second quarter of 2020, according to the U.S. Bureau of Economic Analysis on state gross domestic product (GDP).
Since then, however, the Silver State has come a long way on its road to recovery.
And it’s Northern Nevada that’s leading the charge.
From April to November (the most recent month of data available as of this story’s writing), the unemployment rate in the Reno-Sparks metro area decreased from 20.4% down to 5.4%, according to the U.S. Bureau of Labor Statistics. Meanwhile, the Las Vegas metro area, which relies more heavily on gambling and tourism than the north, saw its jobless rate go from 34% to 11.5% during that span, per BLS.
All told, Nevada’s continued efforts to reopen businesses and resume activities led to the Silver State’s GDP growing 52.2% in the third quarter, the biggest increase in the country.
Sure, the states that took the biggest dip in economic activity, like Nevada, had more room to run when the recovery started in Q3. However, Mike Kazmierski, CEO of the Economic Development Authority of Western Nevada (EDAWN), feels there is much more fueling the comeback, particularly across greater Reno-Sparks.
“It shows our transition to a more tech-oriented economy is working,” Kazmierski told the NNBW. “You expect to have a pullback and we have not had that pullback, which tells me, and should tell the community, what we're doing is working.
“We clearly have weathered this pandemic better than just about any other community in the country. Certainly, our work to diversify our economy has been a big part of that.”
Fact is, even though leisure and hospitality were the region’s hardest hit sectors, and Washoe County saw about 21% fewer visitors in 2020, greater Reno-Sparks has been on a strong upswing.
Kazmierski said diversifying the region’s economy for unprecedented times like these has been EDAWN’s focus since the Great Recession. It’s why big tech firms such as Tesla, Switch, Google and Apple have flags in Northern Nevada. It’s why the region has morphed into a hub for technology, advanced manufacturing and logistics and warehousing.
Kazmierski said many of those industries didn’t miss a beat in 2020, adding: “They’ve been working, they’re getting paid.”
Chiming in on behalf of the Silver State as a whole, Bob Potts, deputy director of the Governor’s Office of Economic Development, said Northern Nevada has been a prime example of the importance of flexing economic diversification when a downturn strikes.
“If there’s ever been evidence of how real strategic economic development efforts pay off, I think you can see how that’s happened in Northern Nevada,” said Potts, noting that the Reno-Sparks unemployment rate in November (5.4%) was more than a point lower than the national rate (6.7%). “It’s really showed up as far as being able to bounce back from a pretty severe downturn. It’s one of the standout regions in the country.”
Ann Silver, CEO of the 2,000-plus-member Reno + Sparks Chamber of Commerce, echoed that sentiment.
“I think what we definitely found out is that we were more resilient with a diversified economy,” Silver said. “Unlike Vegas, which is so dependent on tourism and gaming. While I think our tourism-casino-hotel business is absolutely critical to our economy here, I think we weren’t as entirely dependent as Southern Nevada has been.
“That resiliency was a product of maybe a decade-worth of ensuring that diversity of types and sizes of businesses here.”
Kazmierski said EDAWN expects the migration of California companies and remote workers to Reno-Sparks — a trend accelerated by the work-from-home conveniences brought on by the pandemic — to only speed up moving forward.
Specifically, he said Bay Area entrepreneurs and tech founders are trading the traffic and high cost of living for more space and a higher quality of life in Northern Nevada.
“People in the Bay Area looking for reasons to either relocate or do remote work has driven a lot of activity our direction,” he said. “It’s obviously a much friendlier environment when it comes to government mandates and other issues associated with the pandemic.
“So, we’re seeing that continuous inflow of talent to the region — that’s going to help us long-term.”
Kazmierski said one of the region’s biggest opportunities in 2021 is to continue bringing in quality, high-wage jobs to not only attract out-of-state talent, but also detract local graduates from fleeing the region.
Potts said the pandemic has likely put Reno-Sparks on the maps of many advanced manufacturing and tech companies that might not have considered expanding or relocating to the region a year ago.
“We just need to have really great landing places for companies, and we have to have the right workforce,” he said. “And I think we have that, in large part, and that’s why you’re seeing a lot of the growth.”
Brian Bonnenfant, project manager of the Center for Regional Studies at UNR’s Nevada Small Business Development Center, said the region’s burgeoning advanced manufacturing and logistics industries will anchor the region’s recovery.
“That has legs, that has a lot of bandwidth for us as the global economy is changing to get the supply chains paralleled,” Bonnenfant said. “They’re not really going to shut down their factories in China and Vietnam, but they’re going to bring their stuff back (to the U.S.) so that they have backup systems. So, these parallel supply chains will work to our benefit in our region immensely if we keep the cost of doing business here low.
“No incomes taxes and no inventory taxes really help out with that industry.”
In mid-December, EDAWN announced that it helped convince 30 companies — the bulk in advanced manufacturing and technology — to relocate and/or expand their workforce to the region in 2020. In all, those companies will add nearly 2,300 jobs over the next few years, with an average wage of $28 per hour.
The incoming job creation is an encouraging sign for Reno-Sparks, which lost 12,600 jobs — nearly half of those coming in the leisure and hospitality industry — since November 2019.
Bonnenfant, though, said many of the folks who lost their jobs have opportunities to be retooled and retrained into area’s high demand jobs, such as distribution and construction. He pointed to Nevada SBDC data that shows companies are competing and paying more to fill open positions.
In the second quarter of 2020, wages in Reno-Sparks grew about 9% compared to Q2 of 2019, he noted.
“Before COVID, the fear was the big wage battle,” he said. “And that people just can’t afford to hire because of the cost of doing business with these wages. That’s what we’re going to be facing when we come out of COVID again is that fight for the worker, especially if you’re out at Fernley and the TRI (Tahoe Reno Industrial) Center. Those guys pay a lot more for anybody out there than Reno-Sparks just to entice the commute.”
Still, Silver said the country needs a “continued infusion of financial support from the government we all rely upon” as the pandemic continues to impact small businesses.
Helping matters, she said more businesses are prepared to navigate the application process for federal aid after having done so early in the pandemic.
“We're going to do everything we can to make sure money gets into the hands of small businesses in this community,” Silver said. “And that that puts them over the worst hump of what they've gone through over the most critical time of this pandemic. And that 2021 sees a resurgence in business and job opportunities.”
Everything from the region and state’s enhanced focus on clean energy — “which will create thousands of jobs,” Silver said — to the higher education system’s boost in workforce development programs will help buoy Reno-Sparks, she noted.
“I think 2021 is going to be a very exhilarating transition year,” Silver said. “Hopefully everybody's ready for it. We've had time to prepare for it.”
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