UNR Vision: Mining, agriculture industries primed for 2020 growth
RENO, Nev. — Gold production will jump, hemp acreage will grow and affordable housing supplies will remain low.
While that isn’t quite the 2020 outlook for Nevada in a nutshell, those were a few of the projections made during the University of Nevada, Reno’s College of Business’ inaugural Vision 2020: The Nevada Economic Forecast, held Jan. 31 at the Peppermill in Reno.
With a 2019 population north of 3 million, a job count over 1.5 million and an unemployment rate south of 4%, Nevada is one of the fastest-growing states in America.
While much of that is attributed to the state’s booming urban centers (Reno-Sparks and Las Vegas), the rural areas contribute significantly to the Silver State’s economy — and are ripe with opportunities for growth, said Patricia Herzog, director of rural and economic development for the Governor’s Office of Economic Development (GOED).
Housing and workforce
One major area of opportunity centers on work-based opportunities for in-demand occupations, such as construction. Herzog noted that 75% of in-demand, middle-skill jobs require work-based learning, as opposed to on-the-job training.
“Many companies are looking for workers with a high school education rather than a bachelor’s degree,” she said, pointing out a statistic that 46% of the top 100 in-demand jobs have a typical entry-level education of a high school diploma or less.
Compounding that workforce challenge, however, is the oft-reported lack of affordable housing available throughout the state.
Zooming in on Washoe County, Brian Bonnefant, director of the UNR Center for Regional Studies, said there are 0.4 new units built for every new job. With the county’s population projected to grow by 42,300 by 2024, that means 17,423 new units (3,485 per year) are needed over the next four years, Bonnenfant said.
Bonnenfant expects home sales and development to continue to expand in adjacent counties. After all, compared to Washoe County’s median sales price of $389,000 for an existing single-family home, the cost is $40,000 less in Carson City, $72,500 less in Dayton — and $110,000 less in Fernley.
“Affordability is out there,” he said. “And as tens of thousands of acres are being taken down and purchased for industrial development, we’re going to have to look at the region more for affordability and new development.”
Zooming out to Northern Nevada as a whole, though rural areas make up only 10% of Nevada’s population (roughly 173,000), they contribute 12% of the state’s gross regional product (GRP), and 19% of its exports, Herzog said.
Unsurprisingly, mining is the top-performing industry for rural Nevada, with a GRP over $4 billion in 2018. Mining pays well, too, as the average wage per worker is $118,521.
After all, “our highest value export good is gold,” Herzog said. “We’re usually one of the largest producers of gold in the world.”
And that should follow suit in 2020. For example, Nevada Gold Mines, the joint venture with Barrick Gold and Newmont Gold, expects to mine between 3.5 million and 3.8 million ounces of gold annually from the combined Nevada operations, according to previous reports.
Richard Perry, administrator of the Nevada Division of Minerals, added that 76% of gold production in 2018 was attributed to Barrick and Newmont, whose merger closed last summer.
And, with gold prices likely to rise in 2020, Perry noted an “increasing amount” of Nevada’s gold production will be attributed to mid-tier and smaller companies.
“We’re seeing a rebirth of companies that are exploring Nevada,” Perry said. “If you’re really in the gold production business in the world, you need an address in Nevada to be significant in the equity market. Because this is where the know-how and the people and the technology comes from that populates mines in other countries in the world.”
Perry said a growing trend is underground mining (rather than open-pit mining), with more than 30 percent of gold produced from underground. He added that Nevada mining is a “major user of tech,” noting underground mines are increasingly using autonomous equipment.
In all, there were 195,804 active mining claims in Nevada as of Oct. 28, 2019, an uptick of 1.1% from October 2018.
Hemp, agricultural growth
Meanwhile, a growing trend in Nevada’s agriculture sector will be an increase in licensed hemp acreage, said Cadence Matijevich, administrator of the Nevada Department of Agriculture.
This comes on the heels of the adoption of the 2018 Farm Bill, which removed hemp as a controlled substance, allowing for the legal production of the non-intoxicating variety of the cannabis plant.
“There was a 650% increase in licensing outdoor acreage from 2018 to 2019,” she said.
However, as policy and rules are still being established by the USDA and FDA, producers, haulers, processors and regulatory entities face a steep knowledge curve, Matijevich said. As a result, of the 14,113 acres licensed for hemp in 2019, only 35% of the acreage has actual hemp planted.
“This is folks getting ready, licensing their acreage, waiting for those regulations to be finalized so that they can actually get seeds in the ground and start growing and producing,” she said.
In terms of export opportunities for Nevada in 2020, Matijevich said coffee is projected to increase due to the expansion of coffee markets throughout China, South Korea and Japan — “the growth of coffee consumption in Asia cannot be understated,” she said.
The Starbucks roasting plant in Carson Valley is the primary driver for Nevada’s increased coffee exports, she said.
Despite ongoing difficulties, Northern Nevada’s office real estate market will endure, experts predict
IGT’s decision to list its 1.2 million sq. ft. campus for lease this month and the recent $3.8 million sale of Harley Davidson’s 3-story financial services building in Carson City are the latest examples of companies no longer needing larger-scale office properties to maintain productivity levels and meet customer needs.