Nevada’s economy has been dominated by a handful of industry clusters that include hospitality and tourism, construction, and mining. These clusters are highly sensitive to boom and bust cycles that make the Nevada economy vulnerable to severe downturns–even when the national economy experiences only minor slowdowns. In recognition of the need to diversify, the Clark County Education Association (CCEA) retained Anderson Economic Group to analyze the state of Nevada’s economy, identify industry clusters that promote stable and sustainable economic growth, and make recommendations on how to support those clusters.
We reviewed industry employment and GDP data to determine how Nevada’s economy was impacted by COVID-19, then compared the impacts to those of peer states. We analyzed industry cluster employment, wage, and workforce data to conduct a shift-share and location quotient analysis to determine which Nevada industry clusters had experienced recent robust growth and had the potential to continue growing into the future. We conducted interviews with state, local, and private sector business leaders to determine what economic advantages Nevada could build upon, and how those advantages could support future growth in the target industry clusters. We also reviewed existing economic development efforts and determined how the state could reorient economic development resources toward the industry clusters with the highest future growth potential.
We identified the clusters that were becoming more concentrated, including aerospace, transportation and logistics, distribution and electronic commerce, and businesses services. We recommended that policymakers focus on these clusters, since they present new growth opportunities. To do so, we proposed aligning workforce development systems with the needs of employers in these clusters, and ensuring they have access to robust transportation infrastructure. We also reviewed trends in the state’s housing market to highlight how housing shortages can hinder economic growth.
We presented our report CCEA. CCEA used the document to help inform the Nevada legislature and the Governor’s Office of Economic Development as they planned for Nevada’s future economy.