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2012 Profile: Has Nevada Turned the Corner to Economic Recovery?

Nevada Profile, The Shelby Report of the West

Last updated on August 16th, 2012 at 12:08 pm

[gn_note color=”#66cc66″] The 2012 Nevada Profile originally ran in the February 2012 edition of The Shelby Report of the West. Due to reader requests we will be posting our Profiles from each edition of The Shelby Report. The profile will be published on theshelbyreport.com one month after it has run in print. [/gn_note]

by Kristen Cloud/staff writer

It’s been a while since Nevada could say it saw much sign of its economy turning around, but 2011 may have marked the year it at least gained some momentum in a positive ­direction.

“I think this last year, it was a real interesting transitional year,” says Robert Hooper, executive director of the Northern Nevada Development Authority based in Carson City. “I believe we saw the corner turned as far as economic development is concerned and the economy.”

He cites recent unemployment numbers as part of his ­reasoning.

The state’s November unemployment rate was 13.0 percent, down from 13.4 percent that held steady for the three consecutive months prior. It also is a considerable improvement over nine straight months in 2010 when Nevada’s ­unemployment rested at 14.9 percent. Still, The Silver State’s unemployment rate is the highest in the U.S. and remains well above the national average, which fell to 8.5 percent for December.

The high overall unemployment led officials to keep the state unemployment tax at an average rate of 2 percent in 2012. That doesn’t mean, though, that Nevada employers are escaping higher unemployment taxes, according to the Retail Association of Nevada (RAN).

While the state tax remains the same, employers will pay an extra $7 on the current $63 per worker in federal unemployment taxes on their income tax returns in April. The ­federal government by law has automatically increased its unemployment tax to start collecting on a loan to Nevada, expected to reach $861 million by Sept. 30.

 North may be faring better than south end of state

Though Hooper reveals he sees better conditions across Nevada, it appears the north may be climbing out of the deep recession quicker than the south end of the state.

“Overall, we’re (Northern Nevada) seeing a lot of companies going through expansion right now,” he says. “We’re seeing a number of new companies coming into the area and actually the interest levels are going up. A lot of companies are coming here—from the East Coast and from Europe—in order to service the West coast. Northern Nevada is just blessed; we’re geographically just in the right spot.”

Carson City in particular, ­located at the base of Lake Tahoe, is a long nine hours away from Las Vegas where, according to a Brookings ­report, circumstances are less than desirable.

The report, released in mid-December and prepared by Brookings Mountain West researchers at the University of Nevada, Las Vegas, indicates job growth in Sin City ­stagnated in 2011. In fact, according to the report, government layoffs contributed greatly to the city’s economic woes, and production levels remained depressed.

Construction and housing, an area of the Nevada ­economy that has been especially hard-hit, is seeing some ­recovery—though its collapse continued to limit overall growth in the state in 2011, according to the report. The state tops the nation in foreclosures, with vacant homes ­dominating neighborhoods.

The north may be healthier on that front as well.

“I’m starting to see more start-up in more single-family units,” Hooper says. “The industrial space, which also had a lot of construction jobs in it, we’ve seen just in our region a 43 percent decrease in inventory over the last two years. In fact, we’ve seen decreases in the inventory of commercial office space, industrial and private residence—enough to where you’re starting to see things happen as far as new projects starting to take on.”

In Las Vegas, home values continue to fall but at a much slower rate than in previous quarters, the reports says. In all, Vegas home prices have dropped by nearly 65 percent since 2006, meaning home prices are unlikely to recover in the city any time soon.

“The road to recovery remains long and uncertain,” the report notes.

Hooper, for one, is hopeful that the recovery will be quicker for the state as a whole than many expect, ­particularly with Gov. Brian Sandoval at the helm of the ­effort. Sandoval took office in January 2011.

“Gov. Sandoval’s really gotten his arms around the ­economy of the state. He’s provided excellent leadership within the state,” Hooper says. “He’s re-tooled economic ­development and brought the north and the south together.

“We have a great partnership that’s developed between workforce development, economic development and education, both K-12 and the Nevada System of Higher Education. So everybody’s working together toward the same goal.”

“It’s neat when you see everybody pulling in the same ­direction,” Hooper adds.

In addition to the modest improvement shown late in 2011 in getting people back to work, Hooper says Nevada experienced tax gains last year.

“Everything’s going back the right way now,” he says.

Bryan Wachter of RAN tells Nevada Business magazine that visitor spending rose in 2011.

“Not only are we seeing more people coming to Nevada, but the amount of money they’re willing to spend has increased from (2010),” he tells the magazine.

And, even the slightest growth is a step up these days, experts say, especially since Nevada has suffered such a tough economic fall.

“Nevada had experienced such huge growth that, when the bubble busted, we fell further because we were higher up,” Hooper says. “So, it’s been a little harder to turn around. But, like I said, this last year I saw us turn the corner and we’re very optimistic about (2012).”

Grocery market loses some, gains others

A popular grocer in the state announced in January that it plans to close a store in Las Vegas.

The Fresh & Easy Neighborhood Market store, located at 4810 W. Ann Rd., is among a dozen stores the company plans to close across three states due to what a company spokesperson says is “not enough growth in sales and ­customers.”

The stores may reopen when “economic and business conditions warrant,” says the spokesperson, adding that all affected employees will be offered positions at nearby stores.

Despite the dozen planned shutters, Fresh & Easy is expected to open 25 stores by the end of March as part of reworking its strategy and focusing on areas that will be more profitable, the company says. Locations of those stores had not been announced at press time.

Other store openings in the Las Vegas area: employee-owned WinCo Foods is currently hiring at its new stores in North Las Vegas and Henderson. The Boise, Idaho-based company has two stores in Reno.

Instead of gaining some stores as Southern Nevada is, Carson City lost a landmark in November.

After 80 years, Safeway closed its doors when the company couldn’t agree on lease terms with the property owner, according to RAN.

Hooper calls it “disappointing,” but says “there’s another one of their companies, which is a farm supply-type company, that’s going to move into that space so we actually didn’t lose any jobs or anything. It’s just going to take a little different emphasis—probably there were just too many stores here.

“We have several of the Save Marts that used to be Albertsons that used to be something else. Now we have two Smith’s just in Carson. We’ve got a Raley’s. There are quite a few grocery stores here, we never have a problem with that. And, of course. We have two Walmart superstores and Costco. We’re pretty well covered in grocery.”

Numbers back up Hooper’s claims.

According to the U.S. Department of Agriculture, Carson City in 2008 had the highest number of grocery stores per 1,000 people in the state, as measured by counties with five or more grocery stores, according to RAN’s December newsletter.

“Carson City—while having the highest population density in the state, thus skewing the comparison—had 2.35 grocery stores per 10,000 people. Clark County and Washoe County had about 1.4 and 1.5 grocery stores per 10,000 people, respectively.

More information about Nevada grocery stores per capita by county, per 10,000 population (2008), from Nevada Appeal:

  • Carson City 2.35192
  • Clark 1.39961
  • Douglas 1.31173
  • Lyon 0.75739
  • Storey 0
  • Washoe 1.55257

In other grocery news, shoppers are using eight do-it-yourself check stands at the Smith’s (a Kroger Co. banner) at 2255 E. Centennial Pkwy., RAN reports. The store also has eight cashier-assisted lanes.

Some grocery store chains nationwide are doing away with the do-it-yourself option in the name of customer ­service.

“Some other regional chains and major players, including Albertsons locations, have reduced their unstaffed lanes and added more clerks at traditional registers,” RAN says in its January newsletter. “Self-serve lanes will remain a staple in Southern Nevada, however. All 34 Las Vegas-area Albertsons stores are owned by Supervalu Inc., which has no plans to eliminate the service.”

Nor is Smith’s planning to eliminate self-serve at its 35 stores in Southern Nevada, according to the Las Vegas Review Journal.

“Customers very much like the choice of self-checkout,” Smith’s spokeswoman Marsha Gilford tells the Journal. “Sometimes it’s because they like to use the technology or they like to control how the items get put in the bag.”

Gilford mentions Smith’s shoppers, particularly younger ones, are comfortable with technology.

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