First Independent Bank: NV has fastest-growing economy in the nation
October 1, 2018
RENO, Nev. — Nevada is blessed with the fastest-growing economy in the nation, and the Reno-Sparks metro area has mirrored that economic growth with substantial gains in employment, labor force and wages, according to the Regional Intelligence Report presented Sept. 20 at the First Independent Bank Fall Economic Forum.
Employment in the Reno-Sparks Metropolitan Statistical Area (MSA) grew by 3.8 percent between June 2017 and June 2018, which helped lower the unemployment rate by 0.8 percentage points to 3.4 percent in June of 2018, according to the report, which was presented by Dr. Christopher Thornberg of Beacon Economics.
The growth in the labor force between June 2017 and June 2018, meanwhile, reached 3.2 percent, easily beating the state's 2.8 percent growth.
Logistics — which includes Trade, Transportation and Utilities — grew 1.8 percent between June 2017 and June 2018. That growth led to the hiring of an additional 900 employees over the past year, helping Logistics now account for more than 22 percent of the region's total non-farm workforce of 53,400. Between 2016 and 2017, the annual average wages in Logistics grew by 3.2 percent to $43,400.
"It's encouraging to see many industries in Northern Nevada showing consistent gains year-over-year," said Bob Francl, EVP, regional president. "This speaks volumes about the advantages of doing business in Northern Nevada, and why we see so many out-of-state companies looking at what our region can offer.”
The largest growth — in terms of percentage gain and workers added — happened in Manufacturing. Between June 2017 and June 2018, the industry added 3,700 employees, growing 22.4 percent.
Recommended Stories For You
Rising alongside the gains in Manufacturing was Exports. Between 2017 and 2018, Exports increased 5.76 percent to reach $2.5 billion. More than half the value of total Reno Exports came from the Computer and Electronic Product Manufacturing, accounting for $1.4 billion in 2017.
Another sector experiencing robust growth is the Professional, Scientific & Technical industry. With Tesla's Gigafactory and Apple's data center operating in the eastern region of the metro area, hiring grew 5.2 percent between June 2017 and June 2018. That translated into 1,600 new jobs. Wages for workers in this sector have also increased, signaling strong demand for these skills. Between 2016 and 2017, annual average wages in Professional & Technical Services rose 3.3 percent to reach $76,500.
Leisure and Hospitality in Reno remain the second-largest sector in the economy after Logistics. Between June 2017 and June 2018, Leisure and Hospitality grew 1.6 percent adding 600 employees for a total workforce of 38,200. Wages rose 3.1 percent in 2017 with the annual average wage at $23,800. That is lower than the industry average in Nevada of $33,100.
Other important findings in the Regional Intelligence Report include:
Taxable Sales: The Reno-Sparks Metropolitan Statistical Area (MSA) experienced a 2.2 percent uptick in taxable sales between 2017 to 2018, year to date. Food Services and Drinking Places were up 6.1 percent to reach $1.25 billion over the past year. Gaming revenue shot up significantly in the region, rising 15.9 percent between June 2017 and June 2018. Total gaming revenue as of mid-2018 was $412 million, 7.2 percent higher than the same period in 2017.
Construction: Slower growth in Construction also translated into lower taxable sales. Specialty Trade Contractors' taxable sales dropped 17 percent between 2017 and 2018, comparing January to June. Construction of Buildings' taxable sales was also down 37.3 percent during the same period. The only Construction subsector to increase this year was in Heavy & Civil Engineering Construction, which was up 17.2 percent between June 2017 and June 2018, reaching $57.8 million.
Housing: Back in December 2005, the Reno housing market reached its highest point when the median home price hit $359,400. Twelve and a half years later, taking inflation into account, the Reno residential market is still recovering. Although home prices have risen significantly, sales have decreased. In June 2018, 796 units sold for the month which is a 21.5 percent drop from June 2017. A tight supply of housing is the primary cause of declining homes sales and increasing rents.
Home Prices: In June 2018, Zillow reported Reno's median home price was $352,400. Home prices increased 11.3 percent between June 2017 to June 2018 and are now 78.2 percent higher than the Nevada median price of $275,000 and 75 percent higher than Las Vegas' median price of $263,000. When compared to similar metro areas, Salt Lake City's median home price of $337,000 in June 2018 is slightly lower than Reno's. Sacramento boasts an average home price of $400,100.
Rents: Lower housing permits have translated into higher rents. Reno apartment rents rose 6.1 percent from the second quarter of 2017 to the second quarter of 2018, reaching $1,250 per month. Higher rents may be responsible for a 0.3-percentage point increase in vacancy rates as potential renters look elsewhere for less expensive options. The Reno MSA rental market has an overall vacancy rate of just 3.5 percent.
Storey County: The County has grown significantly since the opening of the Tesla Gigfactory in 2017. Total employment jumped to 11,100 workers, a massive increase of 66.9 percent from 2016. Manufacturing was responsible for most of that increase, meaning 4,000 additional workers from 2016. Unlike Reno, Construction in Storey County increased 131 percent with the addition of 880 workers between 2016 and 2017. Household employment in the region was at 1,900 as of 2017, which indicates that Storey County workers are commuting from nearby areas.
Lyon County: The County has become another destination for workers seeking more affordable living options. Half the residents in Lyon County commute outside for work, with the Tahoe-Reno Industrial Center especially popular. In 2016, 21 percent of residents in Lyon County worked in Washoe County, and 19.9 percent worked in Carson City. Lyon County is continuously adding residential products. From 2016 to 2017, total single-family permits increased 54.5 percent. In 2018 (January to July) single-family permits reached 192, larger than both 2017 and 2016 year-to-date values.
This article was provided on behalf of First Independent Bank. Go to bit.ly/2OpUxDW to download the entire Regional Intelligence Report.