Economists see 3 percent growth in 2001, 2002
Eds: Resending
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By KEN RITTER
Associated Press Writer
LAS VEGAS - With the building boom in megaresorts over for now, the Las Vegas economy should pull back from the ''astronomical levels'' of recent years, UNLV's Business and Economic Research center director predicted Thursday.
Expect 3 percent growth for the next two years, center Director R. Keith Schwer said.
Gambling revenues should level off a bit, he said, but demand for the area's 120,000 hotel rooms should remain high.
''The key thing is, the southern Nevada economy continues to expand, (but) with more modest growth than the last four or five years,'' Schwer said after the eighth annual Economic Outlook conference at the University of Nevada, Las Vegas.
The morning after Vice President Al Gore conceded the presidential election to Texas Gov. George W. Bush, Schwer and center Associate Director Mary Riddel predicted Bush would back a ''moderate'' tax cut.
''Nothing dramatic,'' Riddel told the conference, ''but a policy to encourage investment.''
The Republican Bush had promised to return part of a federal budget surplus to taxpayers.
Schwer and Riddel contrasted indicators that the U.S. economy is slowing with a November poll showing southern Nevada businesses are optimistic about local growth.
More than half the 200 companies said they expect to hire employees next year, and 70 percent said they expect to expand or remain the same size. A year ago, two-thirds said they were hiring and 92 percent said they were growing. Schwer said the poll margin for error was 7 percent.
Conference attendee Frank Pearce, an auditor with the Clark County Sanitation District and a 30-year resident of Las Vegas, said he said he saw signs that the steep rise in local growth is leveling off.
He cited a rise in local housing prices and a dip in the pace of development on the Strip and said both sent ripples throughout the southern Nevada economy.
''But we still have a good business climate for entrepreneurs and small businesses,'' Pearce said.
One in three Las Vegas jobs is in the hotel and amusement industry, which got a huge boost with the openings - from October 1998 to August - of the Bellagio, Mandalay Bay, Venetian, Paris and Aladdin casino-resorts.
Construction accounts for 10 percent of southern Nevada jobs.
Schwer noted that no new megaresorts are due to open in 2001 or 2002. He called it natural after such a building boom for investors to pause to see if room supply would outstrip demand. Riddel said that the new hotels combined to add 12,000 hotel rooms.
The national economy could weaken due to high energy prices, an increase in household debt, falling stock prices, slumping corporate profits and a softening of the dollar against overseas currencies.
Riddel put the chance of a recession at 11 percent in 2001 and 20 percent in 2002.
But hotel occupancy rates should remain at 90 percent or better, with the number of area visitors - some 30.6 million in 1999 - topping 36 million in 2001, according to center projections.
''People would still take a vacation,'' Riddel said. ''But they may substitute a vacation to Las Vegas instead of a trip to Europe.''