Report: western states edging toward recovery
Las Vegas — The West is recovering faster than the nation as a whole, but employment across the region remained far below pre-recession levels and the housing market showed few signs of improvement, according to an economic report released Thursday.
The report prepared by Brookings Mountain West researchers at the University of Nevada, Las Vegas focused on economic growth in 10 metropolitan areas spread across Nevada, Arizona, New Mexico, Utah, Colorado and Idaho.
Overall, the region saw a modest 0.3 percent growth in employment in the quarter ending in September, compared to the national rate of 0.1 percent, the study found. Utah, Colorado and New Mexico — states that have built broad economic bases — struggled the least, researchers said. In Arizona and Nevada, the housing collapse continued to limit job growth.
“We don’t have a robust, steady recovery yet,” said Mark Muro, policy director for the Brookings Metropolitan Policy Program. “The real estate crack up continues to have a severe influence on the places that struggle with it.”
In all, every metropolitan area lagged behind pre-recession employment levels, with Phoenix and Las Vegas experiencing the sharpest differences. Job levels languished 10.8 and 13.4 percent below their respective pre-recession peaks.
“The road to recovery remains long and uncertain,” the report noted.
Still, there was enough employment growth in the past year to drive down the unemployment rate in every major metropolitan area singled out by the report. Utah and New Mexico had the lowest unemployment rates, while Las Vegas had the highest at 13.6 percent.
Leading the recovery were Utah’s Ogden and Provo, Albuquerque in New Mexico, and Phoenix. Boise and Las Vegas showed modest signs, but Tucson, Ariz., and Colorado Springs were still struggling, according to the report. Ogden and Provo saw employment rise by 1.5 percent, and Idaho’s Boise saw a 1 percent increase in jobs.
Employment grew by less than 1 percent in Phoenix, Colorado Springs, Salt Lake City and Tucson.
Among the areas that faced a difficult quarter, such as Denver and Albuquerque, job growth in Las Vegas stagnated — a sign of Nevada’s highest-in-the-nation unemployment rate. In Albuquerque and Denver, job growth fell slightly.
Manufacturing gains drove the jobs numbers in Provo and Ogden, while government expansion helped Boise grow its work force. Conversely, government layoffs contributed to economic woes in Colorado Springs, Las Vegas, Albuquerque and Denver. Production levels remained depressed in Tucson, Boise, Phoenix and Las Vegas.
The housing market offered few signs of recovery. Prices across the region remained significantly below last year’s totals.
Still, the report highlighted some positive milestones. Prices remained stagnant or improved in eight of the metropolitan areas for the first time since the recession began in 2007. In Las Vegas and Tucson, home values continued to fall, but at a much slower rate than in previous quarters.
In the latest sign of hardship for Sin City, prices there saw the biggest drop from last year, at 19 percent. In all, Las Vegas home prices have dropped by nearly 65 percent since 2006. The steep fall means home prices are unlikely to recover in Las Vegas any time soon, according to the report. Nevada tops the nation in foreclosures, with vacant homes dominating many neighborhoods.
“A lot of people bought five or six houses strictly as an investment,” said Mike Young, president of the Nevada Association of Realtors. “People just walked away. The values are too upside-down.”
Hard-hit Tucson, Boise and Phoenix also will not see improved home prices in the foreseeable future, the researchers concluded.
“They have high foreclosures, they had massive real estate and construction employment that crashed and that kind of crack up has proven to be toxic to places,” Muro said.
Business leaders called the report’s findings accurate. In Tucson, where some of the major employers include national banks, health centers and the University of Arizona, officials are trying to promote higher education and attract more technology companies to the region to expand its work force. But the recovery remains weak.
“The Sun Belt markets have just been hammered by the mortgage meltdown and everything having to do with this economy,” said Michael Varney, president/CEO of the Tucson Metropolitan Chamber of Commerce.