CBER Director Keith Schwer said Southern Nevada likely will lag behind the rest of the nation's financial progress because the Las Vegas economy is a one-industry consumer-based system that is experiencing a troublesome trifecta--a slump in the housing and construction sectors, an unemployment rate above the national average and a decrease in visitors to Las Vegas.

"Southern Nevada's economy is dependent upon discretionary spending," Schwer says. "In an economic downturn that's the first type of spending that will be cut back."

As a result, Schwer says Southern Nevada needs to be prepared for a sharper downturn than in more diversified economies. "Economic diversification is one of the recommendations from this report," Schwer said. "Las Vegas is a destination resort so the critical factor for our economy to recover quickly would be a global economic rebound and then the U.S. economy picking up."

The economists' estimations in the report include:

• Construction will be slow and unemployment will likely increase causing more foreclosures. Unless population growth occurs, a slump in the Las Vegas housing market could continue until 2011.
• The opening of new leisure and hospitality properties will grow jobs; however, until consumers are confident about their job prospects, they will remain cautious about spending on discretionary items like leisure travel.
• Leisure and hospitality properties will market low-cost packages in the form of room and entertainment deals, thus the tourism industry is expected to begin to recover before the housing market, but it will not be enough to improve hotel and casino revenue streams in the short term.
• Further job losses are expected in the construction, housing and tourism industries even when the economy picks up.