State on road to economic recovery
Nevada employment numbers are expected to return to pre-recession levels by the end of this year or early next year. In some categories, they already have returned.
That’s the gist of the report presented Wednesday by Christopher Robison, Nevada Department of Employment Research and Analysis Bureau, to members of Nevada Business Connections (NBC) at their May meeting, held at Great Basin Brewing Company in Reno.
Robison replaced Bill Anderson of DETR, who was unable to make it, as a morning speaker. He presented details of the April statewide employment report released May 18. Numbers for specific counties and metro regions will be released May 24.
Statewide unemployment in April was 5.8 percent, the same as March, he said, half of what it was during the peak of the recession when it stood at 13.7 percent.
The state has seen about 46 straight months of decline in unemployment when compared to the same month the previous year.
The gap between the national unemployment rate and the state is also narrowing. In the peak of the recession Nevada unemployment was 4.4 percent higher than the national average.
“That’s now been cut down to about 0.8 (percent) difference,” he said. “We’re getting close to a pretty normal rate of unemployment now, which is between 4 and 5 percent (unemployment).”
In terms of employed compared to the percentage of the population, “during the pre-recession boom, it was 64 percent, which is unnaturally high for us,” Robison said. “It’s dropped down quite a bit, to 57 percent.”
Nevada currently has about 1.3 million jobs in the market, gaining about 400 jobs in April, or 2.6 percent. Nationally, jobs are growing at a rate of 1.9 percent. Nevada currently is the third fastest growing state in terms of job growth.
“So we are making significant improvement that should help us reduce that gap in unemployment levels between us and the U.S.”
Initial unemployment claims are trending down.
“We expect that to continue until we reach our natural rate, probably in the next year or two. We’ve seen quite a bit of reduction.”
Wages are also slowly improving. In the fourth quarter of 2015, the state average weekly wage was $935, the highest on record.
“This was one of the weakest areas in our recovery,” Robison said. “It kind of lagged a couple years behind the employment resurgence.”
Retail has already surpassed pre-recession highs in this area, he said, as have professional and business services.
The professional and business services sector “is about the third fastest growing segment in the state,” he said.
Construction is the fastest growing industry.
“Construction is sort of the happy and sad story at the same time,” Robison said. “Construction was the hardest hit industry during the recession. And part of that was because construction, which had averaged 90,000 jobs, jumped all the way up to about 150,000 during the construction bubble. It reached 11 percent of total employment statewide, which is a very unhealthy level of employment for an industry like that.”
The recession hit construction very hard because of overbuilding and other issues, losing about 100,000 jobs. Only 46,000 have been added back into the industry.
“The positive side of that is that we don’t actually want to see it reach the pre-recessionary high because that wasn’t healthy. At this point, we expect in the next couple years, we’ll actually reach a normal average in this sector, which is about 5 percent of the economy, and that’s what it should be.”
Manufacturing is growth is also strong. It accounts for about 3.3 percent of the total jobs in the state. The Reno-Carson area has about half of the manufacturing jobs in the state.
Manufacturing added 650 jobs in the past 12 months.
There are signs a dramatic increase is on the horizon. There’s a dramatic difference between the number of job postings at 9,100 versus actual employment growth.
Robison said economists expect a lot of positions to be filled in the next year or two as larger companies like Tesla, which is expected to start manufacturing at the end of this year, as well as opening the Switch SuperNAP data center.
“They’re building candidate pools right now,” he said of the high number of job postings.
In the healthcare sector, the growth chart is a pretty straight upward line. “I wish all of (the industries) were this easy to forecast,” Robison said.
“It’s one of our more underdeveloped industries in our state but we do expect to see continued growth. We’re starting to catch up.”
Exports are also doing well. Nevada has about $6 billion per year in exports to other countries, chiefly gold shipped to Switzerland and India.
It’s not enough to stimulate growth in mining however. Mining and logging are the only industries to show a negative job growth.
“We’re still seeing a contraction (in mining) even though gold prices dropped years ago. We’re still seeing the residual impact,” Robison said.
In addition to the employment update, the NBC meeting featured Justin Sawri, director of sales for the Reno Bighorns. He talked about the opportunity to see major players in basketball in Reno and the benefits to visitors and businesses.
“74 percent of players in the NBA spent time in D League at some time in their careers. … You can see NBA level talent at affordable prices.
Coaches and referees also get training in D-League play.
Reno Bighorns is locally owned and the owners have a huge connection to the city, he said.
“They take huge pride in representing this community and giving back to it.”
For business owners, the Reno Bighorns have opportunities to “extend your brand and to market your brand internally and externally.” Tickets can be used to reward employees and entertain clients.
The next meeting of NBC will be June 15 at Gold Dust West Casino in Carson City. Doors open at 7:30 a.m. with the one-hour meeting at 8 a.m. For more information, go to nvbizconnect.com/.
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