Speaker 1: I’m Tom Harris, I’m
the director of the University
Center for Economic Development (UCED) at the University of
Nevada, Reno (UNR). And for this podcast we have
Dr. Eugenia Larmore. She’s the
president of Ekay Economic consultants. Ms. Larmore got her doctorate here at UNR . And part of her dissertation
was developing a leading
coincidence economic indicators for the Reno Sparks SMSA. What we’re going to be
discussing is her July August
publication which is available on her website and talk about
what’s going on in the Reno
Sparks SMSA. Which is Washoe County and
Story County. So Eugenia are things still
looking as promising as people
have been talking about? Speaker 2: Yes they are. The good news it continues for
the Reno SMSA. All of the
indicators agree We have a couple of small red
blurbs, but the majority of
which are seasonal. So if we look at our leading
index which includes a number
of local statewide and national indicators. We have taxable
sales, gaming revenue, and
homes sold on the local side. We have some airport
information to show the traffic
coming through the area. And now we focus on statewide
information such as, initial
claims for unemployment, and national data on stock market
interest rates and money
supply. And everything is put together to give us one number
that we compare month to month.
What it’s showing us is compared to last month. We’re talking all of the
indices here use June 2017 data. So in June 2017 compared to the
previous month, our local
economy as represented by this index grew by 36%. And as this is the leading
index, this is something that we’re
expecting to continue in the
local economy over the next six to 12 months. So again a .36% increase, we’re still growing steadily, we haven’t had any decline in
many months. And we have grown from last
year according to this index,
by 4.3 percent. What’s of interest is our
coincidence index which, while
the leading index attempts to project where the local economy
is going to go over the next
six to 12 months, the coincidence index really
represents the economy as it
has right now. Our coincidence index combines
two employment statistics. One is the local area
unemployment statistics, and the other one is the census
of employment. What it is showing is that our
coincidence index increased by
25% between May and June of this year, and 3.2 percent from
last year. And as this is employment,
we’re speaking of employment in
the area, I wanted to throw in some
interesting information. For example wages in Washoe
County in the last five years
increased from about $20 to $22 over the five year period. That’s an 8.3% increase. These are median wages for the
employees in Washoe County,
with an 8.3% increase over five years. CPI consumer price index
also known as inflation, is how much does it cost for
you to purchase things
increased 8.5% during the same period. So our wages in the county
increased by slightly less than
the Consumer Price Index. So while wages are growing
they’re not quite keeping up
with our inflation. What’s interesting however is,
we talk about Washoe County has
a median wage of $22 per hour, Tahoe Reno Industrial Center
(TRIC). A lot of talk about a TRIC with
Tesla and Google and other big
national companies moving to the area and locating in TRIC. Their wages increased by 18%
and are now at almost $26, so a
$4 difference between employment in Washoe County and
in TRIC. So there is a lot of talk about
how TRIC it is bringing high
wage jobs to the area. They actually are. And those jobs are growing,
18.4% percent change in their
wages over that five year period again over double what
the CPI was. So there is some good news on
growth there. So employment as of June 2017
Washoe County unemployment is
at 4%, the national unemployment is 4.4%, so it is
looking better even than the
national level. At the state level is 4.8 percent a little
bit higher. But all three
numbers, US, NV and Washoe
County are all below what we consider to
be natural unemployment which
is about 2.7 percent, but usually looked at as about
5 percent. So we are employing almost
everybody who needs to be or
wants to be employed or is able to be employed in the area.
Which is good news in some
ways, in some ways that means to fill the multiple jobs that
we’re expecting to come into
the area we’re going to have to have people move into the area. And that brings us to our
construction index. We have a business activity
index and all it is, is just a
local business activity index and it is showing great growth
no drops there. So we’ll skip
through that. So just know for that our local
business business activity
index has been growing for 51 straight months and is
continuing to grow. Great news again for the SMSA.
On the construction index we
grew by 2% from the previous month, from May to June. And we grew by over 50% from
last year. Strong construction
growth in the area. For this
index, we track construction
employment, which has been increasing
significantly, commercial
building permit valuation which dropped slightly, between May and June and that’s
likely seasonal and just
smaller projects applied for building permits this month
than previous months. Not a concern unless it becomes
a month to month trend rather
than a onetime issue. Commercial building permits,
just the number of permits
grew, and the residential permit evaluation and permits
actually grew significantly at
9% and 6% respectively. So a lot of construction growth
expected for the area. And then
our housing index, single family housing index for a look
at non-farm employment as this
is the people who are creating the demand for housing. Or
looking at single family homes
sold median price of homes, and then housing opportunity index
homes are selling, prices are going up, as everybody’s hearing. Some
concern is our housing
opportunity index. Prices are growing steadily and strongly
and we’re getting to the point
where homes are becoming unaffordable. For example, our median price for single
family homes in Washoe County
as of the second quarter of this year is $332,000. If we look at the median family
income for Washoe County and
use an affordability calculator, they can afford
$275,000 home. So having over
$50,000 gap between what is
affordable and what people in the area can afford? So that’s creating
an issue, incomes for Fearnley
and Dayton, their prices are still significantly lower the
Washoe counties and with the
opening up USA Parkway the road will connect Dayton to TRIC. So a lot of employees may
choose to go outside of Washoe
County for their residence. So overall good news a little
bit of some growing pains ahead
with employment growth, with the high price of housing. But we are growing which is
great news. But the housing
problem is also a national one.
Thank you Eugenia. You can go to her website
Ekayconsultants.com and
download copy of her Coincidence and Leading Economic Indicators. As she said Washoe
County has really maintained
its self and grown out of the depths of this great recession, and continues to grow. For the future it looks like our growth for the economy is still very
strong. So thank you Eugenia. We’ll be
doing these podcasts every
quarter, and hopefully we’ll have some other information for
you that you we will find
interesting. THANK YOU

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One thought on “UCED Podcast: HOW IS THE RENO-SPARKS ECONOMY DOING?”

  1. Pershing County gives Business and home buyers the most bang for the buck. It's all about debt to income ratio, Pershing County's affordable and mathematically doable. Pershing County is the safest place in Northern Nevada to build as well.  People/developers want brand new well thought out infrastructure that will last. Construction/consumer loans will be properly vetted this time around and only the responsible will be approved for sure.   🙂

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