The “Great Recession”, in Vegas, was horrific for those of us in the Construction Industry. It tested us all and few survived or are in recovery with about 70% of construction related businesses gone; either out of business or moving over the horizon. Construction unemployment was pegged somewhere between 60 – 70% for the trades and the pool of good skilled workers is almost non-existent.
The recession cleansed the market.
Marginal contractors are gone and, today, a new batch of contractors are entering the market hoping to earn a living and grow when the economic climate will allow for it.
To be in this business a person must suffer from acute optimism.
Once upon a time the glass was either half-full or half-empty. Today, the glass is cloudy and we are not sure what the level is, except to say, we are optimistic but “highly” guarded. The lessons learned are keeping most of us from becoming exuberant about new hires, equipment acquisitions and increasing overhead costs. Honestly, it is a scary thought to invest in the future with so much uncertainty.
From the acutely optimistic perspective there are a lot of great things happening. In order to be brief and to the point some of the great things are:
- There is 9 Billion Dollars in work in the planning stages or underway on the Strip
- New money is being invested in the skeletal remains of the past recession found on the Strip like the renewal of the Sahara into the SLS and the Chinese investment in the old Stardust property, the Echelon.
- For the past 3 years over 40 million visitors have come to the valley; however, they are looking for value and not leaving much money behind.
- Based on the November number for gaming, it looks like the number for Vegas are up about 4%
- Home price appreciation was enormous over the past couple of years with underwater homeowners somewhere south of 50% or better.
- Commercial lease vacancies are still high but improving
- Unemployment is improving but job creation and income levels are still low
- Our education system is another sore subject altogether.
There are threads of good news whizzing around but we are all very cautious since the sting from the recession is ever present. “We need more certainty and confidence” to jump-start those of us in the Construction Industry before investing and creating new jobs.
The big issues are, in my humble opinion, the impact of a proposed margin tax and the availability of water to sustain the current population and to sustain growth.
What are your thoughts?
The Vegas economy is getting better.