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The big question, says State Demographer Jeff Hardcastle, is how Nevada workers respond to declining employment opportunities over the next decade.
If they pull up stakes and head for other states, Hardcastle says, the state will see a dramatic reversal from the two decades in which Nevada led the nation in population growth and businesses could count on ever-expanding local markets.
If, on the other hand, folks decide to stay put, the state is likely to see lingering high rates of joblessness with all the additional cost pressures that places on unemployment taxes and government assistance programs.
But there's little question in Hardcastle's mind that employment opportunities will remain weak for at least the next five years, and perhaps for as long as 20 years.
And that's likely to result in falling population in Washoe County.
By 2016, Hardcastle projected last week, the population of Washoe County is likely to be about 398,000, a decline of 4.3 percent from its level in 2009.
The population of Carson City, he projected, is likely to fall by about 3,000 people by 2016.
That would demand a fresh approach to the market from business owners ranging from the largest homebuilders to the smallest restaurant owner.
"A shrinking population is never a positive sign for retail, which thrives on consumer households and rooftops," says Chris Waizmann, a commercial real estate broker with CB Richard Ellis who works with many of the nation's big chains in their search for store locations in Northern Nevada.
The challenge posed by a falling population will be accentuated, Waizmann says, because the region already has more retail than it can support in some sectors and the market needs to get supply and demand back into alignment.
Among others feeling the pressure of a falling population could be owners and managers of apartment complexes.
Don Wilkerson, president of Gaston & Wilkerson Management Group, a Reno-based manager of residential and commercial properties, says rents are likely to be pressured downward if fewer potential tenants are looking for homes.
"Property managers are going to have to work harder to get the same market share," he says. While Hardcastle has confidence in the short-term likelihood of a population decline, the longer-term outlook for growth of jobs and population in the Reno-Sparks market is filled with uncertainty.
The state demographer's office ran economic data through two sophisticated economic forecasting tools in recent months.
One of them, developed by Regional Economics Model Inc., pessimistically forecasts that the population of Washoe County will total 412,190 in 2030 - a figure that's 4,000 below the 2009 population.
A more optimistic scenario is generated by a forecasting tool developed by Moody's.com. It forecasts a population of 522,460 in Washoe County 20 years from now. That would mark an increase of nearly 106,000 people.
The difference between the two forecasts? Moody's.com expects business activity in Nevada to rebound along with the national economy, although the state may lag a little.
The Regional Economics Model, however, sees weak job growth in Nevada even as the U.S. economy rebounds.
Both forecasting models expect a national recovery to be fully under way only by the middle of this decade.
The divergence between the two forecasting models generates wildly different numbers on an industry-by-industry basis:
• Moody's.com projects that construction employment in Washoe County will double between today and 2020. REMI expects a modest 9.5 percent growth in construction jobs.
• REMI expects manufacturing employment in the Reno-Sparks area to decline by nearly 14 percent during this decade. Moody's.com expects that will go the other direction and increase by more than 13.4.
• The leisure and hospitality sector, REMI projects, will add about 13 percent to its employment. Moody's.com puts the number at closer to 37 percent.
The demographer's analysis of population trends also throws a stark spotlight on the bubble and collapse in the construction industry statewide.
The sector grew three times faster in Nevada than it did in the rest of the nation from 2000 through 2006, and the construction workforce in Nevada grew by nearly 76 percent during a time that the population grew by 23.5 percent.
"What is striking is how concentrated we have been in three sectors over the past decade: accommodation and food services, mining and, especially at peak employment, construction," Hardcastle wrote in an analysis.
He said the hopes of some that an influx of retirees will buoy Nevada's economy is uncertain because no one knows if they'll have either the desire or the ability to relocate here in sufficient numbers to make a difference.
But health-care organizations and groups that serve the elderly still are likely to see a growing demand for care.
"We are likely to be impacted by people who migrated here during their working years, who are aging here and impacting the need for services," Hardcastle wrote.