Northern Nevada:

Region on a Roll in its Recovery, Although Economic Issues Persist

Northern Nevada’s unique business diversification will aid its economic recovery in 2021 as workers and households experience what other regions are going through: a bifurcated economy with lower-wage employment playing catch-up to the higher-wage, stable workforce.

That’s according to the most recent forecasts and trends presented by experts from the Economic Development Authority of Western Nevada (EDAWN), EKAY Economic Consultants, RCG Economics consulting firm, and the Nevada Department of Employment, Training and Rehabilitation (DETR). These experts’ opinions spotlight intriguing viewpoints, trends and projections so your credit union can plan appropriately.

Economic Development Authority of Western Nevada (EDAWN)
Presented on Feb. 4 (Applied Analysis consulting firm’s presentation: “State of the Economy in Northern Nevada”): 

Northern Nevada’s economy is well positioned compared to other metropolitan regions as it enters 2021 and its growth is poised to outpace other regions’ economies. The local region will experience its fair share of job growth and stabilization from 2020’s economic slowdown as U.S. gross domestic product (GDP) will most likely grow 3.5 – 5 percent in 2021. The same job/industry diversification that the region has fostered and built for several years on end is assisting in its recovery from the COVID-19 recession in springtime of 2020.

Northern Nevada’s economy isn’t dealing with one crisis — it’s working through five crises: public health, economic, fiscal, legal, and social. “This creates a paradox of prosperity,” said the keynote speaker. “I hear it all the time — 'We're doing good and business is up.’ But that’s not true for everyone, and it does create something of a dichotomy in the local economy.” The Reno-Sparks region has been positively impacted by the financial phenomena of congressional fiscal relief dollars, which made Nevada’s total personal income shoot up to $24.5 billion in 2020 (an increase of 300 – 400 percent when compared to the previous individual 10 years).

However, local taxable retail sales are up (reaching the highest level ever). How? The multiple rounds of congressional/federal stimulus dollars passed in 2020. Also, there was an unprecedented amount of monetary policy relief by the Federal Reserve that is still ongoing today to help local households and consumers. Washoe County's local residents/consumers spent money in different ways from a year-over-year growth perspective (taxable retail sales growth in 2020 versus 2019): non-store retailers such as online/e-commerce (112 percent growth), building materials/gardening equipment and supplies (15 percent growth), miscellaneous store retailers (8 percent growth), food/beverage stores (8 percent growth), sporting goods/hobbies and book/music stores (5 percent growth), motor vehicle and parts dealers (4 percent growth), merchant wholesalers of durable goods (3 percent growth), and general merchandise (1 percent growth). Electronics and appliance stores (-9 percent) and clothing/accessories stores (-10 percent) were the only negatives, perhaps somewhat due to logistics and transportation/supply chain disruptions mixed with a hit to consumer demand.

From November 2019 to November 2020, the Reno-Sparks region’s total non-farm payroll employment growth (or lack thereof) registered -5.2 percent. This is better than most other metropolitan areas across the nation, but it’s still behind Baltimore, St. Louis, Houston, Cincinnati, Tampa, San Antonio, Denver, Atlanta, Phoenix, Dallas, and Austin. For comparison, from March 2019 to March 2020 total non-farm payroll company job growth grew 1.1 percent (beating out the majority of other metropolitan regions, but still coming behind Houston, Tampa, San Antonio, Denver, Dallas, Phoenix, and Austin).

The Reno-Sparks region’s total non-farm employment/categorial growth broken down by industry from 2020 is as follows: manufacturing (800), financial activities (200), professional/business services (200), mining/logging (0), information technology (0), construction (-500), "other" services (-600), education/health services (-900), government (-2,400), trade/transportation and utilities (-3,900), and leisure/hospitality (-6,100) — with total job losses of -13,200 (the good news is that it wasn’t lower due to the region’s economic diversity going into the pandemic recession of 2020). What has helped buffer 2020’s losses is the fact that from 2015 – 2020, the area benefited from the following outstanding multi-year job growth: manufacturing (12,500), professional/business services (5,200), construction (3,700), trade/transportation and utilities (2,800), education/health services (2,100), financial activities (900), information technology (600), mining and logging (100), "other" services (0), state/local government (-1,100), and leisure/hospitality (-3,500) — a total of 23,300 jobs created within a five-year period.

Amid the Reno-Sparks region’s economic growth streak from 2010 - 2019, workforce and cost-of-living issues came to light over the past few years as local home values continued skyrocketing. Northern Nevada is continually impacted by job wage growth that can’t keep up with housing expenses for certain workers and families. However, the region is still a hotbed of business activity, job creation, and population growth due to the environment local leaders have created and look to continue fostering going forward — which helps somewhat offset those other issues.

You can view the entire forecast: make sure you click here to see the video archive presentation (scroll down to top video under "Latest Videos"). Also, for the keynote speaker/economist’s presentation slides, click here. For EDAWN’s presentation slides, click here.

EKAY Economic Consultants
Released on Feb. 4 (“Reno MSA Economic Outlook and Industry Trends for December/January 2020”):

The Reno-Sparks metropolitan region's leading economic index — an ongoing projection of future positive or negative economic activity based on current business/consumer activity — surpassed its pre-COVID level (February) by late September 2020 (recovering more than 100 percent). By this forward-looking exclusive measurement — based on gaming revenue, taxable sales, home sales, airport passengers, airport cargo, local unemployment claims, monetary supply, and the national stock market — the next 6 to 12 months look positive in general based on month-to-month data (although year-over-year data is still noticeably negative compared to this time last year). Local non-farm employment is up 1.5 percent from November to December of 2020 (but down -3.4 percent from December 2019 to December 2020 — a gap that continues narrowing). Additionally, local household employment is down -0.25 percent from November to December 2020 (but down -8.5 percent from December 2019 to December 2020).

However, the Reno-Sparks area’s corresponding coincident economic index (what actually takes place in the economy when looking back) has recovered 73 percent from its COVID-19 drop in 2020. The coincident index increase is the result of the partial reopening of the economy following COVID-19 quarantine measures in March and April 2020. While recovering, this index has still declined -6 percent from December 2019 to December 2020 as some businesses remained closed or open with restrictions, and some employees are choosing to postpone their return to work (meaning the index is at a level not experienced since early 2018). The leading index (mentioned up above) gives hope that the months to come will show an even greater recovery than what’s already transpired in the coincident index. Additionally, the recovery is uneven across the state — the Reno-Sparks region’s job market health has significantly outpaced the Las Vegas region, in addition to never reaching the same unemployment spike (job losses) that Las Vegas experienced in spring of 2020.

As businesses slowly reopen (partially or fully), employment and spending are increasing in the Reno-Sparks region and unemployment is declining. Much of the recovery has been driven by the region’s industry diversification, since over many years employment has shifted from a leisure/hospitality base to a manufacturing and logistics focus. The region continues to attract new companies and expand existing businesses, helping shield it from recessionary impacts plaguing other parts of Nevada and the United States.

For more local information and data: see the latest economic outlook or the industry trends.

RCG Economics (consulting firm)
Released in December/January:

The latest employment data for Northern Nevada shows slow/steady job growth. Click here to see the latest January report and trends in Reno-Sparks and other Nevada metropolitan job markets (comparisons, weekly inflation-adjusted wages, industry/job breakdown, jobs index, private jobs versus total payroll jobs, rank by metropolitan area, and other year-over-year trends).

You can also click here to see monthly archives. Additionally, see the Reno-Sparks/Northern Nevada ongoing economic metrics report. Also: “The Pandemic is Resetting Nevada's Economy: The Path Forward.”

NV Department of Employment, Training and Rehabilitation (DETR)
Released Jan. 15 (Unemployment Insurance Claims Press Release):

Trends for Nevada’s unemployment insurance benefits (all types) are moving in interesting ways. Make sure to click here to read more, including trends on initial unemployment insurance claims (both pandemic unemployment assistance and regular), as well as continuing claims (extended benefits, pandemic emergency unemployment continuance, pandemic unemployment assistance, and regular). Scroll down to see all graphs and charts.

Nevada Small Business Activity
Updated routinely by Homebase, a provider of real-time digital tools for small businesses:

Small business activity across Nevada was down at varying amounts compared to pre-COVID levels as of mid-December 2020. Activity was down -23 to -28 percent depending on the measurement analyzed. In contrast, the region was down between -68 to -80 percent in April 2020 before starting to recover. Measurements include the volume of hours worked by employees, the number of businesses open, and the number of employees actually working. You can click here to learn more and pick your region.

Northern Nevada: Demographics, Labor, Education & Economic Resources

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