LV biz experts predict 2008 to be tough year

February 08, 2008 - Richard Lee just wasn't himself last week.

The vice president and director of public relations of First American Title Co. of Nevada who has spoken enough times at the annual Preview Las Vegas that he has been elevated to guru status is almost always upbeat in his view of Southern Nevada's economy.

But not this year.

Although Lee feigned whining and moaning and joked about feeling beat up, the reality was that he wasn't as upbeat as he's been in previous years at the annual event sponsored by the Las Vegas Chamber of Commerce and the Nevada Development Authority.

Lee said at the Jan. 31 event that he's still glad to be in Las Vegas, and he gave glowing reports about World Market Center, Fremont Street East and Queensridge and the start of a new growth spurt spurred by the opening of Palazzo and, later this year, Palms Place and the Trump International.

The expansion would be sustained, he said, thanks to CityCenter, Fontainebleau and Echelon on the horizon, and the promise of the Plaza Las Vegas, M Resort and Dragon City in the Chinatown area.

But for now, he said, times are tough.

"In Las Vegas, you need to be remarkable," Lee told the nearly 1,000 people who came to the forecasting and networking event. "You're either remarkable or invisible."

Lee said "amateur night is over, and only the pros survive" in a market like today's.

In past years, Lee has previewed the arrival of resorts and expounded on how they'd contribute to Las Vegas' status as a boomtown. This year, he spent more time on lower profile projects with the potential of being quality-of-life-changing developments.

Among them are the new Vegas PBS complex, solar energy generating stations at Nellis Air Force Base and Eldorado Valley, the Nevada Test Site, the Children's Critical Care Network and the return of call centers to the valley to take advantage of the 24/7 lifestyle.

Lee's reserved presentation may have been inspired by the speaker who preceded him, Jeremy Aguero, principal of Las Vegas-based Applied Analysis.

He, too, had a presentation grounded in reality, acknowledging that economically, 2008 is going to be a tough year.

Aguero presented his top 10 list of things to watch to gauge recovery, heading it this year with employment growth.

Aguero warned that by the end of the year, there could be more jobs trimmed than created in Nevada. (A day later, it was reported job creation nationally entered negative territory for the first time in four years.)

Part of the reason for the potential downturn is a product of the state's success in diversifying its economy, Aguero said.

"It's a double-edge sword. Our economy is more diversified and more susceptible to the ups and downs of the things that are occurring nationally," he said. "It's harder for people to grow during a recessionary period."

The construction industry, largely affected by Aguero's No. 1 trend to watch last year - the slumping housing market - was largely responsible for some of the downturn.

Aguero said 11.9 percent of the workforce at the end of last year was in construction-related industries, two times the national average.

But another factor was the employment buildup in boom periods such as 2005 and the spending that occurred in those good times.

"A lot of the buildup that we have is a result of huge amounts of unsustainable levels of consumer spending," Aguero said. "So consumers also are also pulling back. Places like restaurants are overstaffed. It's going to take some time to get back to that level.

"It'll get back, but to imagine that 2005 was by any way sustainable is just unrealistic."

The rest of Aguero's top 10 trends to watch for are housing market instability, consumer spending, the tax climate, vacant land pricing, population growth, the prospect of a national recession, the 2008 ballot box, the commercial market performance and area water resources.