Edward Estipona, president of Reno’s Estipona Agency, wanted to hear from the local experts about Northern Nevada’s economic future and where companies are doubling down on talent and growth. The creative marketing agency celebrates its 30th anniversary in business this year, and he’s hopeful that by working together, area agencies and small businesses will face the recession with brute confidence.
“I want to get a pulse on what’s happening in our local economy,” Estipona said. “I think Northern Nevada itself is uniquely positioned where we have more demand, and I’m curious from EDAWN’s perspective and other industries’ perspective. … But the best business opportunity still goes back to what we’ve done well for Northern Nevada, and that’s manufacturing. Tesla’s doubling down, and it’s not just Tesla. There are a lot of companies coming.”
Nearly 1,400 attendees at Economic Development of Western Nevada’s annual economic update luncheon on Jan. 26 at Reno’s Peppermill Resort Spa Casino heard from Executive Director Mike Kazmierski and Brian Gordon, principal of economic analytics with research firm Applied Analysis and certified public accountant, about the nation’s impending recession affecting the job and housing markets as well as education.
Employment, one of the largest drivers of attracting talent, as a strategic workforce hub and to build Northern Nevada as a successful, thriving metropolitan community, is top of mind for businesses, Kazmierski said. Most companies are asking how they can recruit workers at a reasonable pay level to fit their needs and their workers’ lifestyle.
Kazmierski said Northern Nevada brought in 27 new companies in 2022, equating to 2,263 new jobs with an average wage of $68,000. There were 12 new corporate headquarters established, and 12 companies of the 27 were from California with 11 specializing in technology.
Jessica Garcia / Nevada Appeal
Brian Gordon, principal with research firm Applied Analysis, discusses the impacts the housing and job markets are having on Northern Nevada at EDAWN’s annual economic luncheon on Jan. 26 at the Peppermill in Reno.
Kazmierski said the average wage goal for 2023 is $65,000, which exceeds the median $36,434 from 2015-16’s actual numbers and fares shy of 2022.
He said there will be more announcements in the coming months.
“People have figured out this is a great community, and so we see more and more and the right kinds of companies looking at us — manufacturing, again, is our sweet spot,” he said. “With the onshoring that happened during the pandemic, we’re really the only place that can be successful, or one of the few places that can be successful, because we have a lot of advantages — strategic location, water and other things that allow us to be attractive to manufacturers.”
Community development also helps in attracting millennials, who are key to support renovations and in building new schools. Nevada, according to the Education Law Center, was the only state to receive all Fs in funding level, funding distribution and funding effort.
One of the challenges in bringing businesses and their employees to the Silver State as a viable opportunity for families is education is not considered a priority since the state’s per-pupil revenue has dropped 9% in three years in state and local sources, Kazmierski said. The Washoe County School District, for example, is funded at $10,309 per pupil, or 60% of the national average of $16,740 according to WCSD’s 2020-21 annual Comprehensive Financial Report. But by offering incentives or challenges, such as helping Washoe schools set up a robotics program by the end of 2023 that offers curriculum, training and workshops, Kazmierski said EDAWN can encourage more science, technology, engineering and mathematics (STEM) learning and pathways for young workers from the schools into careers or trades.
“We need to focus on the needs of employers,” he said. “How do we help them be successful? … You look down the pipeline and into the future.”
Affordable housing also makes it difficult to keep people in their homes or help them move into them. Gordon said buying power has come down by 31% in the past 12 months, with resale home closings for single-family and condo and townhouses dropping overall from 2018 to 2022. Median sales prices went up for single-family homes from $350,000 in 2018 to $615,000 in 2022 and dropped to $519,950 as condo/townhouse prices slowly went up from about $200,000 in the same period to $350,000 and dropping to $309,750.
The Reno-Sparks active inventory for single-family residential homes have shifted from about 600 in 2018 in time and peaked at 1,500 in mid-2019, dropping to 300 in 2021 as adjustments continued as residents stayed in place, Gordon said. That number went back up to 1,400 toward the end of 2022.
New home communities started going back up and sales have contracted.
“The housing market is working through the situation … and these are the some of the growing pains of becoming a major metropolitan area,” Gordon said.
Gordon told the Northern Nevada Business Weekly with inflation rates at or near 40-year highs, the challenges businesses and consumers are looking at from a national perspective are certainly creating opportunities at the local level.
“We are seeing this upward pressure on wages, and we’ve got folks moving around more,” he said. “We have two times more job opportunities than there are people looking for work. That has created this crunch in this unique dynamic. I don’t think that’s going to last forever, but it has created a unique opportunity in the northern part of our state.”