Consumer discretionary spending - that's what's at the bottom of Nevada's economy, says Martin Regalia, vice president for economic and tax policy and chief economist for the U.S.
Chamber of Commerce.
And that's good news for Nevada.
The national economy shows positive growth potential, he says, so consumer expenditures are likely to perk up this year, The Washington D.C.-based economist, in a telephone interview last week, explored the new year in a preview of his upcoming speech.
He'll speak Feb.
4 at Directions 2005, a business forecast forum co-hosted by the Reno-Sparks Chamber of Commerce and Economic Development Authority of Western Nevada.
Look for about a 4 percent growth in the gross domestic product for the national economy as a whole, said Regalia, with about 150,000 additional jobs per month nationally for the year, along with modest wage growth.
What this adds up to is more income for Nevada.
Those discretionary dollars held in the pockets of consumers are likely to make it into retail (10 percent of Nevada's economy) and tourism (upwards of 25 percent of Nevada's economy).
"Nevada depends on discretionary income," said Regalia.
Travel, tourism, gaming, and recreation are all things that people can choose not to do.
This year, he expects them to choose to say yes to fun.
"With the economy improving," he said, "discretionary expenditures are likely to perk up."
In fact, travel and tourism should be one of the hottest growth industries for 2005, he added.
That includes consumer dollars spent on gaming.
And Nevada's unusual snowstorms, too, so highly publicized all over the nation, should be an extra bump for the area's travel industry, he added a bump for ski hills as well as for spring water sports.
The retail sector, which Regalia estimated at about 10 percent of Nevada's economy, is fairly solid, he said.And with a positive wage growth for the population underpinning people's spending, retail should be healthy for the coming year.
Another sector making a comeback is technology, added Regalia.
And this is because business investment is coming back.
A positive business climate begets an increase in software and other technology expenditures.
But what can this mean for Nevada, a state not known as a high-tech mecca? Once again, Nevada's friendly neighbor California can be counted on for an indirect effect, said Regalia.
A healthy Silicon Valley high tech economy translates into more tourists coming over the hill for winter and summer sports, as well as gaming.
And if there is one major factor driving the economy this year, it might be a psychological one.
The national elections are over.
"People will get back to doing what they do best," said Regalia.
And that's running their businesses."The uncertainty of the elections are behind us." But don't look for spectacular growth across the nation, he added.
Look for positive, modest growth.
