Each year, Nevada business magazine compiles data comparing Nevada to other states and US averages. A large part of these annual exercises is tracking how the state reacts to the ups and downs of business cycles. Assessing the damage wrought by the economic fallout from the COVID pandemic, however, is more like taking stock of a Category 5 hurricane. Although the sun is finally peeking through the clouds, the numbers show it is still not for Nevadans It is time to put away their sandbags and umbrellas.
Compared to other states, Nevada’s economy has suffered severe damage over the past year due to its reliance on travel and tourism. In addition, it is still challenged by low rankings in education and health care, as well as an above-average crime rate. These long-standing problems affect the quality of life for Nevada residents and hinder efforts to diversify the economy by attracting new businesses.
One measure of the economic devastation caused by the pandemic is nationwide visitor traffic, which is down more than 36 percent year-over-year. Hotel occupancy fell by 43 percent, and conference visits disappeared completely from April to December 2020. Nevada wasn’t the only one to suffer losses for the tourism industry; other major tourist states also recorded double-digit losses. The second half of the year is expected to improve as long as the surge in COVID cases is contained and the numbers don’t continue to move in the wrong direction.
Demographics show that life in the urban areas of the state is not that different from life in the rest of the country. Nevadans may work in a world-famous hotel or five-star restaurant, but away from the glamor of the resorts, they go shopping, attend church services, and enjoy parks, golf courses, and cultural events. Given the great distances between cities, the population density is much lower than other states, and rural Nevadans enjoy a lifestyle of their own.
Nevada was at the bottom of the national education rankings for decades, long before the magazine started the chase. Some progress has been made, but the jump from 50th to 46th place still gives the state a poor grade. Nevada students are less likely to master basic subjects such as English and math and are more likely to drop out of school. However, Silver State students have higher scores on SAT tests and there have been significant improvements in many of these areas. Given the importance of education to economic development, more is being done when stakeholders and business leaders are involved.
Nevada ranks mid-table for personal taxes and ranks 29th but has no state income tax but instead relies on sales taxes and other types of assessments. It does better on business taxes, with an overall ranking of 7. Many companies choose to move to Nevada from higher tax states like California (49th place) because there is no corporation tax, no inventory tax, no franchise tax, and no flat tax .
Cost of living
Apartment and rental prices are well above the national average, a statistic that is unlikely to improve in the foreseeable future given the current boom in property prices. The other common household expenditure corresponds to the national figures. It should be noted that gas prices have increased significantly since the withdrawal of this report. At press time, the average Nevada gas price was $ 4.06 for a gallon of regular unleaded gasoline. But a dollar in Nevada still goes further than the national average, according to a study that takes into account the impact of state taxes.
Cost of doing business
It is generally cheaper to run a medium to large business in Nevada when compared to other locations, according to the Boyd Company. Minden, Fernley and Gardnerville provide convenient access to Bay Area markets without the high cost of California. In southern Nevada, Mesquite and Henderson are cheap compared to other locations. Commercial property prices in the Reno and Las Vegas metropolitan areas are generally lower than in competitive markets.
The Silver State’s health ranking has been a constant challenge, especially when it comes to access to health care. Nevada ranks 45th among the states for active doctors per 100,000 population. The pandemic placed an additional burden on under-staffed facilities, which further exacerbated the shortage of skilled workers. The lack of internship for recently graduated doctors means that many graduates have to leave the state to complete their internship, and they often choose not to return. Local medical schools rise to the challenge and build more residences whenever possible. The Kirk Kerkorkian School of Medicine in the US $ 150 million medical education building of the UNLV is also due to be completed next year.
The recent surge in cases this summer, largely due to the Delta variant of COVID, has once again increased hospital admissions and deaths from the pandemic. Compared to the US average, Nevada had more cases and deaths and a higher rate of positive tests as well. Nevada has a lower percentage of adults vaccinated than the US average, with fewer than half of adults completing the vaccination process.
Tenth place in the nation for violent crime might not be a good statistic, but the 2019 numbers (the latest available from the FBI) are actually significantly better than previous years. For example, Nevada ranked third for violent crime and seventh for murders in 2014. The crime rate is calculated per 100,000 residents, skewing Nevada’s numbers as millions of people visit the Silver State every year, increasing the number of people actually present at the same time.
Nevada’s real estate market, famous for its boom-and-bust cycles, has been scorching hot for some time. Property values across the state have skyrocketed since last year, reaching double digits in some locations, a trend seen in other states as well. New housing developments are emerging across Nevada to keep up with demand, driven in part by the influx of new residents from other states. With increasing demand, low mortgage rates and rising building material prices, it is unlikely that house price increases will stall so quickly.
When COVID restrictions closed resorts across the state, thousands of Nevadans became unemployed – some for weeks or months and others permanently. The unemployment rate rose from 3.6 percent in February 2020 to 28.7 percent in April 2020, a month in which the national rate reached 14.7 percent. After most of the resorts and businesses reopened, the unemployment rate is below 8 percent. The state regained 15,400 jobs in June 2021, mostly in the leisure and hospitality industries, which account for more than 20 percent of total employment in Nevada. The future of the Nevada labor market depends on how the state’s main industries are affected by the public health climate, including possible new waves of infection.
Nevada ranks high in many national polls for its relatively business-friendly environment, moderate tax rates, and low business costs. Its location near West Coast markets, without the high cost of taxes and west coast real estate, makes it attractive for businesses looking to expand or relocate. Economic development agencies are doing everything they can to diversify the state’s economy, but Nevada’s economic future depends on improving its rankings in education, healthcare, and crime, and overcoming the effects of ongoing COVID problems.