Las Vegas Puts All Eggs In One Basket!

Posted: December 8, 2010 in Uncategorized

Brief Extracts of a report by Jennifer Robson (dated 6 Dec 2010)

LAS VEGAS, Nevada — You already know Las Vegas has one of the country’s worst economies.
Now, a new report takes things further.

The Brookings Institution, which is based in Washington but has a local research arm, said Tuesday that the Las Vegas Valley has the world’s fifth-worst economy. The think tank ranked the region No. 146 on its Global Metro Monitor, which rates the world’s 150 biggest metropolitan economies on their economic strength before, during and after the recession.

In its final result, the Brookings report’s assessment of Las Vegas is less a measure of economic torpor than it is proof of just how volatile the city’s economy is, said Robert Lang, director of Brookings Mountain West at the University of Nevada, Las Vegas.

The population of Las Vegas burgeoned by 104 percent to nearly 2 million in that 14-year period, making the city first in the United States and third in the world for population gains. Employment grew 4.9 percent annually, driven by construction, real estate and gaming, and the market added roughly 470,000 housing units from 1990 to 2007. Brookings ranked Las Vegas No. 14 in the world for its overall economic performance in the period.

When the recession took hold of the economy in 2008, though, the trends reversed.

Local employment dropped 4.9 percent from 2008 to 2009, compared with 4 percent nationally. Much of the job loss came in the region’s most important industries: construction, which shed 28,000 jobs in the year, and leisure and hospitality, which cut 19,000 positions. Gross value added slumped even more, dropping 5.4 percent. That indicates the loss of high-value jobs in financial and business services, many of which supported real estate and tourism, the report said. And a region that added a net average of 40,000 residents a year in better times posted a net loss of 1,300 residents from 2008 to 2009.

In that slowest-growth period, Las Vegas ranked No. 128 worldwide.

…. At No. 146, the city’s situation is still worse in 2010, nearly 18 months after the recession’s June 2009 end. The valley’s gross value added per capita has continued to erode, dropping 1.2 percent even as the nation’s average improved. Employment dipped 3 percent, far more than the nation’s 0.7 percent employment falloff.

Observers blame the valley’s abysmal post-recession performance partly on the severity of the local housing crash and partly on the area’s lack of economic diversity.

…. Gordon agreed that Las Vegas could return to growth, but it’ll take a while, he said. First, the nation’s economy must improve, so that spending in the city’s economy can flourish again.

“It’s going to be a slow and painful process. It will require baby steps,” Gordon said.


Editor’s Comment:

With Asian casino hubs like Macau, Korea and Singapore in full swing… under a boom state of affair of their growing economies, Las Vegas situation can only be worse amidst US high unemployment rate. Casino operators like MGM and Harrahs are facing a dire winter. Just think about it, how are they going to clear their huge debts? Also, LV Sands further expansion in Macau has been capped, a clear signal from Beijing. 

Though the US has released 2nd round of Quantitative Easing, US casino operators are still trapped in dire situation as the direction of capital  flow is to Asia.
  1. Las Vegas Puts All Eggs In One Basket! By « Professional Ground DECODER>>,
    A pinpoint analysis.

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