John Seelmeyer

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November 15, 2012
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Economist: Job growth in Reno, Sparks to be lukewarm in 2013

RENO, Nev. - Retailers are likely to lead a modest improvement in job growth in the Reno-Sparks metropolitan area, says a Las Vegas economist in a presentation commissioned by City National Bank.

Brian Gordon, a principal in Applied Analysis, told about 100 business leaders in Reno that he projects job growth of about 1.2 percent in the region next year, slightly better than the growth of slightly less than 1 percent the past couple of years.

That would translate into roughly 1,900 new jobs in the region, which has lost about 35,000 jobs since the onset of the Great Recession in 2008.

"Things are getting better, but not dramatically better," Gordon said.

A couple of hints of a strengthening jobs market come from recent reports on the hours that workers in the region are on the job, and their average earnings. Both have been ticking upward, the economist said.

Gordon noted that taxable sales in the region have risen at 4.5 percent clip this year, and he projected that sales will gain further momentum - maybe to 6 percent or so - next year.

Much of that growth, he said, is coming in sales of big ticket items such as vehicles and appliances as consumers begin making purchases that they deferred during the worst days of the recession.

Tourism and hospitality also shows signs of recovery, and may get even healthier next year as a growing number of Americans indicate that they plan to take vacation trips during 2013. Even so, Gordon said the tourism sector will continue to account for a smaller share of the region's economy.

Growth of the technology sector, he said, will become increasingly important to northern Nevada. The growth of numerous small technology firms in the region as well as the arrival of major data centers operated by companies such as Apple show the direction of the region's economy.

The region also may get a boost from the arrival of Baby Boomer retirees, he said, and higher taxes approved by California voters last week may cause business owners in the Golden State to look more seriously at moving to Nevada.

Still, Gordon said, it's unlikely that the construction industry will resume its position as the economic leader of the northern Nevada economy.

"The economy is going to be less about building new product. It will be about filling that product," he said.

Even though Gordon sees signs of a turnaround in the economy of the Reno-Sparks economy, he noted that the region still is performing more poorly than the rest of the nation.

The unemployment rate of 10.8 percent in Nevada compares with a national jobless rate of 7.9 percent, for instance, and the Reno-Sparks metropolitan area has one of the highest jobless rates of any metro area in the nation.

But the businesspeople in the City National Bank audience last week said they have plenty of worries as 2013 dawned.

Their top three worries, as expressed through an instant-survey technology:

• Uncertainty about the future course of the economy.

• Concerns about the additional costs that will result from federal health care reform.

• The direction of federal tax rates.

Gordon noted that global worries - the disarray in Europe, slowing growth in China - combined with domestic concerns about the federal debt and response to the "fiscal cliff" issues are proving unsettling as well.

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Tahoe Daily Tribune Updated Nov 15, 2012 02:40PM Published Nov 15, 2012 02:40PM Copyright 2012 Tahoe Daily Tribune. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.