Analyst predicts robust Nevada growth by 2014

CARSON CITY – A Moody’s Analytics executive predicted Friday that the Nevada economy will turn around and show robust growth by 2014.

Dan White, assistant director of the national financial research firm, told members of the Economic Forum that he sees “homebuilding turning around in Nevada” and with that will come a surge in purchases of durable goods by residents.

Nevada sales tax revenue has increased every month for more than two years. The increase for this year is 6.1 percent. But White projects a 6.7 percent increase in the next fiscal year, followed by a 9.9 percent increase in the year that ends in July 2015.

Nevada has lost 100,000 construction jobs since the recession began in 2007, including 3,600 this year. But White predicted it will show a larger increase in job growth than the nation with the rebounding of the construction industry.

Homebuilders Research reported that 3,710 homes have been sold in Las Vegas this year, a 33 percent increase. Home prices are up 15.7 percent from a year ago.

White’s comments were greeted with skepticism by a state economist and one member of the Economic Forum, the group of five business leaders who project how much state revenue will be available for state government to spend. That decision is in December.

Chairman Ken Wiles said by waiting members will know more about whether Congress has taken steps to handle the “fiscal cliff” of mandatory budget cuts and tax increases. Some fear their decisions could lead to a new recession.

Member Matt Maddox, the chief financial officer for Wynn Resorts, pointed out that White made a similar projection of a growing economy when he appeared before the forum two years ago.

And state Economist Bill Anderson projected annual state job growth of 1 percent to 2 percent, with companies adding 12,000 jobs in the next fiscal year and 18,000 in the year that ends on July 1, 2015. With that growth, Nevada’s unemployment rate, now the highest in the nation at 11.8 percent, would drop to 10 percent by the middle of 2015, he said.

White made his prediction on a homebuilding recovery, though he acknowledged that banks cannot foreclose against thousand of homes under Assembly Bill 284, which says banks must possess a series of documents before foreclosing. Because of this, the state’s foreclosure rate has fallen. Now about 1 in 40 homes faces foreclosure, compared with 1 in 15 at the peak, top in the U.S..

Maddox also was not particularly optimistic about big growth for the gaming industry. He said the “only way” Nevada gaming will grow is through international tourism, particularly from China.

“International customers will spend more time in the casino,” he said. “Everybody (in the United States) has a casino down the street. People in the United States are coming to Las Vegas for everything but the casino.”

So far this fiscal year, gaming revenue is up 5.63 percent.