This first published August 8, 2008 in the Henderson Home News, a Community Newspapers of Nevada publication.
Is the Boyd Gaming Group’s delay of the Echelon resort just the tip of nontraditional economic indicators forming in the minds of Las Vegas Valley residents?
Most people are less likely to be aware of major economic indicators used by analysts to gauge the ebb and flow of the economy, such as sales of retail and food services or perhaps gross domestic product.
The indicators most of us can relate to are events or realities in our daily lives.
The construction of Echelon being stopped mid-swing for a predicted 12 months is a good example of an event that has a chilling effect on many locals. How so? The very fact that 600 of our neighbors are out of work, leaving them and their families in a state of uncertainty, hits home.
Let’s not forget the contractors and subcontractors who provided our neighbors with jobs. Those companies have suppliers and vendors that rely on them to keep their businesses going and their employees working. The trickle-down effect can be far-reaching in a small community that isn’t economically diversified.
Southern Nevada is dependent upon the gaming and tourism industries and is nowhere near to being economically diverse.
Another traditional indicator is the growing number of empty retail spaces in strip malls. Retail vacancy rate is nearly 7 percent of the 4.5 million square feet built. Office space has been reported at nearly 17 percent vacancy.
A friend once told me Americans tend to base the economy on the price of a hamburger. Well, if that’s true, then we must be in a rut. According to a story in the Wall Street Journal, McDonald’s is considering taking the Double Cheeseburger off the dollar menu or at least exploring how to make it less expensive for the company.
In some locations, McDonald’s has been making the burger with one slice of cheese and calling it the Double Burger with Cheese. Other locations have been selling them for a $1.09. In case you’re interested, this burger flap is actually about the price of cheese and not beef — at least for now.
The stumbling economy and the high price of gas helped tank U.S. auto sales, dropping 13 percent in July. High demand for smaller cars is propping up market hopes while the sales of light trucks and SUVs has all but crashed them. However, the luxury market appears stable — interesting! Perhaps this is an indication of the shrinking middle class.
No worries, though. I read somewhere a dealership in Florida is offering a small car with the purchase of an SUV.
There are plenty of economic woes in the airline industry, as well. Some airlines are charging for more than one bag, whereas customarily one could check two bags for free. Some routes have jumped 276 percent in the last year, making it impossible for some folks to fly.
Fewer people are taking vacations away from home and opting for the staycation, staying home or close to home. I’ve heard of some local families going on mini-Vegas vacations by taking advantage of highly discounted Strip hotel rooms for a couple of days. Actually, you can stay at Harrah’s for $49 a night. If you would like something more luxurious, the Bellagio has rooms from $179 advertised. What a concept! A cheap room in a nice hotel with the best accommodations possible, including pool, cabana and some entertainment.
That’s investing in the local economy.
The bright spot on the horizon is the price of gas is falling. I personally find this very suspect, especially on the heals of record profits by big oil companies. Americans tend to have very short memories, and this is what appears to happen. The oil companies push the price of fuel up to an unbearable point, then back prices down enough to make folks feel at ease before the dramatic climb to the next record price begins. We Americans are dumb enough to play the game. The oil companies continue to make record profits for their shareholders, which is the American way. Rightfully so!
Personally, in the case of Exxon-Mobil I refuse to buy their gas unless there is no other choice. In fact, I would rather pay a little more to a smaller company.
Sure the economy is sucking wind, but what can we do about it? Plenty. Start by going to local merchants whenever possible, even if it might cost a bit more. This helps keep our dollars in our community, where it counts.
If you eat out a lot or a little, consider eating at locally owned, independent restaurants instead of the chains that send profits out of state to other communities. Most local eateries are family owned and operated, thus supporting multiple households. Check out the dining pages in some of our papers or one of our coupon books for good deals.
Supporting our local merchants will help buck both traditional and non-traditional economic indicators. Give no free rent in our minds for the economic boogie man.
Shop wisely, community-wise that is.
Tim O’Callaghan, co-publisher of the Home News, can be reached at 990-2656 or email@example.com. He writes a regular blog at tocomv.blogspot.com.