There’s no work planned on casino megaresorts anytime soon, but a steady stream of smaller building jobs may help the Las Vegas construction industry emerge from its deep recession.
That’s according to the Associated General Contractors of Las Vegas, an association of about 500 local companies and building industry executives.
The AGC issued a report Friday suggesting the local construction industry may have finally bottomed out from its deep decline during the recession.
The report, prepared by local advisory company Applied Analysis, said that after four years of declines, construction-related employment in the Las Vegas area has now increased on a month-over-month basis for four consecutive months through September.
Despite high unemployment (13.6 percent) and falling home prices still hampering the Las Vegas-area economy, the recent strength in the construction industry is part of broader local economic improvements, including continued growth in the city’s important tourist count, the report said.
Construction employment locally of about 41,900 people remains below 2010 levels, the AGC report noted.
But “average hours worked and average hourly wages for construction workers have both spiked during the past few months, a compelling indication that the beleaguered construction sector may have finally found its bottom,” the AGC report said.
After witnessing the loss off 92,000 construction jobs statewide since 2006, the latest numbers are among the first optimistic signals the industry has seen for years, Mandi Lindsay, AGC Las Vegas executive director, said in an interview.
“It’s perhaps a sign of hope,” Lindsay said.
While little building is expected in the overbuilt residential, retail and office sectors, the smaller jobs keeping contractors busy are generally in the health care, manufacturing, government and military sectors, she said.
Another source of steady work for local contractors are hotel-casino companies, many of which are constantly remodeling rooms, refurbishing casino areas and replacing food and beverage outlets.
“That type of work has been keeping a number of our members quite busy,” Lindsay said.
And every construction project is important for the local economy, with construction workers typically making $25 per hour, she said.
“If they’re not making money, they’re not out spending money,” she said.
Among the biggest Las Vegas construction spenders is Caesars Entertainment Corp., which is completing its Octavius Tower expansion at Caesars Palace and plans to invest $550 million in The Linq, a retail, dining and entertainment district on the Strip that is due to break ground this quarter and will employ an estimated 3,000 construction workers.
And MGM Resorts International last week said it spent $78 million on remodeling and refurbishment projects in the third quarter — lifting the total to $162 million so far this year under plans in which a total of $275 million will be spent this year, mostly in Las Vegas. These projects include remodeling rooms at the Bellagio and MGM Grand and the opening of eight new food outlets at the Luxor and Excalibur, MGM Resorts said.
Similarly, executives at the Stratosphere on Thursday said they’re considering adding a restaurant to the casino floor and refurbishing the rotating Top of the World restaurant more than 800 feet above Las Vegas Boulevard in the Stratosphere Tower.
Hotels and casinos can only spend so much on construction as the industry emerges from its own recession. So the best hope for long-lasting improvements for the construction industry may be improved economic development and diversification efforts, Friday’s AGC report said.
“Nevada will need to raise the economic development bar to realize expansions beyond traditional sources of job creation,” the report said, noting Gov. Brian Sandoval and the Legislature have already restructured economic development programs. “Recent legislative action was an important first step; now the hard work of repositioning and competing begins.”