For decades the gaming industry dominated the Northern (and Southern) Nevada economy. Since 2001, increased competition from legalized gaming in California and across the country, shifts in consumer preferences, and economic conditions led to a decline in demand for gaming services, with a resulting decline in gaming employment.
The graph below shows how these changes, along with the recent recession have reshaped the mix of industries in the Western Nevada region. The Western Nevada region includes Carson City, Douglas, Lyon, Storey, and Washoe counties. These counties are closely tied through employee/resident commuting patterns and industry relationships. It should be noted that only major industries are included in the analysis. Industries with a low employment impact, such as Mining are excluded from the analysis.
The graph shows that the Gaming industry had the highest number of employees in the region’s economy (13% of all region employees were employed by the Gaming industry) in 2002. The Retail industry was second in terms of employment at 10% in 2002. Health Care was another significant industry, with 8.4% of total employment, followed by Construction and Manufacturing tied for fourth place with 7.7% of total employment.
During the boom years, the region’s Construction industry grew at a high rate, becoming the third biggest industry between 2004 and 2006, peaking at 29,176 jobs and 10.0% of regional employment. All industries grew between 2002 and 2006, with the exception of the Gaming industry, which saw a loss of 4,100 jobs during this period, a loss of 12.0% from its 2002 levels.
The Great Recession had a significant impact on the structure of the region’s economy and employment. The fastest growing industry in terms of employment prior to the recession, Construction, saw a significant decline in employment, losing over 17,100 between a peak of 29,200 jobs in 2006 and 12,000 jobs in 2013, a loss of almost 60% of jobs. The industry fell from third in terms of percent of total regional employment, to fourth from the bottom, with only Professional and Technical Services, Finance and Insurance, and Management of Companies and Enterprises industries having fewer employees in 2013. Until a slight decline in Professional and Technical Services employment in 2013, Construction was the third lowest industry in the region in terms of employment.
The Gaming industry continued its decline, losing approximately 8,300 jobs since 2006, or 27% of its employment. It is currently the third biggest industry, though it is still trending downward. Other industries impacted by the recession include the Government industry which saw declining revenues and resulting lay-offs through the recession, losing approximately 2,000 between its peak employment in 2007 (19,237) and lowest level in 2012 (17,234), a loss of 10.4% of jobs. The Finance and Insurance industry also lost jobs during the recession with a decrease of 1,400 jobs, or 17% of industry employment.
The Retail industry lost 2,100 jobs between 2006 and 2013, but it remains the number one industry in the region with 28,983 jobs in 2013. The Bars and Restaurants industry lost some employment at the beginning of the recession, but has recovered its pre-recession employment levels and is the largest generator of taxable sales revenue in the region. Also of interest is the reemergence of the Manufacturing industry post-recession. It is now the fourth biggest industry in the region.
Of special interest, however, is the industry that grew through the recession, the Health Care industry. This industry gained 2,700 employees since 2006 and is now the second biggest industry in the region. With the changes in the changes in the health insurance requirements and an aging population this industry may become the biggest in the region in the future.
The recession had a significant impact on the region, changing the mix of employment from the top five 2002 industries of Gaming, Retail, Health Care, Construction, and Manufacturing to 2013 top industries of Retail, Health Care, Gaming, Manufacturing, and Bars and Restaurants. Our economic development strategies must adjust to align with these changes. As the region emerges from the recession, of importance are not only industries creating jobs, but the wages paid to employees in these industries. The goal of economic development is not only to create jobs, but to create jobs with high wages, which creates a benefit for the entire region.
Join us for our blog next week for a look at wages associated with the region’s growing industries.