Will Nevada’s economy support state services for the next 2 years?

Economic experts are giving a tepid forecast for future state revenues during an hourslong Nevada Economic Forum presentation Thursday that will determine what Nevada can afford as legislators weigh passing new policy while maintaining a balanced budget.

The fate of expanded educational programming, new film tax credits and Gov. Joe Lombardo’s priorities on housing, public safety and other subjects could will hinge on the outlook of what the state can expect to collect in revenue during the next two-year biennium.

The Economic Forum report is a state-mandated revenue forecast used by the Legislature to finalize the upcoming biennium budget. A panel of five economic and taxation experts from the private sector is reviewing multiple economic models before voting later Thursday on consensus projections to be used when crafting a balanced budget.

Global economic trends hit home

The Trump administration’s tariffs and the ongoing trade war will do damage to the nation’s economy, according to Emily Mandel, senior economist with Moody’s Analytics, a U.S. based financial services company. She predicted the country will avoid a recession, anticipating a pivot on trade policy.

Growth is already slowing in Nevada, according to Mandel. Employment growth is faltering, and it is expected to remain flat.

Nevada is also already seeing some shakiness in tourism, and experts are expecting fewer visitors going forward, Mandel said. Visitation fell almost 8 percent in March, one of the steepest year-over-year drops since the coronavirus pandemic, according to data the Las Vegas Convention and Visitors Authority reported Tuesday.

Some downtrends are showing in convention traffic declines, while others are based on fewer households planning U.S. vacations, according to Mandel.

International travel is also going to drop, and reduced visits from Canadians will sting, Mandel said. Canadians make up about 13 percent of total visitors to Las Vegas, according to Mandel.

Gaming revenues have been high during several years of high-profile events on the Las Vegas Strip, but there is an expectation of a 5.6 percent decline, Mandel said. A modest pickup is predicted later in the biennium as the economy stabilizes.

Nevada consumers will feel the effects of tariffs due to high prices that are passed onto consumers, according to Mandel. She said the state is relatively insulated because of its relatively low reliance on manufacturing.

However, Nevada has the highest U.S. share of its imports coming from China, heavily concentrated in electronic and communication equipment, said David Schmidt, chief economist for the state of Nevada.

Watching the labor market

Nevada’s unemployment rate is holding steady at 5.7 percent, and while it is still the highest unemployment rate in the nation, Schmidt said the state’s labor market still appears healthy with no major layoffs.

Signs of stress in the labor market are emerging, however. Mandel said the state is seeing an increased rate of multiple job holders, and both she and Schmidt said job searches are taking longer. Schmidt said the increase in duration essentially adds nearly 1 percentage point to the state’s unemployment rate.

Schmidt noted that employment growth has fallen since high levels in 2022 and 2023 that characterized a post-pandemic rebound. Recent data has shown the demand for workers has slowed but that opportunities still exist.

“I think that collective pullback is certainly the biggest risk,” Schmidt said.

The panel will vote on projections for each major general fund revenue source throughout the Thursday meeting.

This is a developing story. Check back for updates.

Contact Jessica Hill at [email protected] and McKenna Ross at [email protected]. Follow @jess_hillyeah and @mckenna_ross_ on X.

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