NEVADA’S ECONOMY: RESET. . . REBUILD . . . RECOVER 2013 Nevada Transportation Conference April 9, 2013 Reno, Nevada Prepared by:

NEVADA’S ECONOMY

This is NOT your father’s recession. Nevada Recovery Comparison: Last 11 Recessions % Job Losses Compared to Peak Job Month, 1948 - 2007 Current Jobs Recession-NV Source: U.S. Bureau of Labor Statistics. Indexed by RCG.

This is NOT your father’s recession, cont. Latest Growth: Feb. 2013 = 1,157,700 Feb. 2012 = 1,133,900 # change = +23,800 % change = +2.1% Pre-Recession (Jan. 2002 - Nov. 2007) Peak Growth: Feb. 2006 = 1,267,400 Feb. 2005 = 1,192,400 # change = +75,000 % change = +6.3% Pre-Recession Annual Average (Jan. 2002 - Nov. 2007) Avg. # change = +40,700 Avg. % change = +4.6% Post-Recession Annual Average (Jun. 2009 - Jan. 2013) Avg. # change = -18,700 Avg. % change = -1.5% Source: U.S. Bureau of Labor Statistics. Indexed by RCG.

The Stair Climb Return RCG Nevada & US Job Index*: 2000 - 2013 Nevada February 2013 = 93.7 2012 Annual avg. = 92.4 2000 - 2012 avg. = 96.3 2000 - 2007 avg. = 98.9 2008 - 2012 avg. = 92.1 * Based on Nevada’s employment-to-workforce ratio (Nevada Department of Employment, Training & Rehabilitation). Indexed to a baseline of 100 in March 2000.

Private jobs growing at a moderate pace, but government jobs continue to lag. Nevada Public & Private Employment Growth: 2003 - 2013 Source: U.S. Bureau of Labor Statistics.

The “real” unemployment rate - beyond the official rate. Alternative Measures of the Nevada Unemployment Rate: 2008 - 2012 U6 = U3 + All Marginally Attached + Part-time Workers - 20.3% U5 = U3 + Discouraged + All Other Marginally Attached Workers-13.3 U4 = U3 + Discouraged Workers- 11% Discouraged workers (U-4, U-5, & U-6 measures) are persons who are not in the labor force, want & are available for work, & had looked for a job sometime in the prior 12 months. They are not counted as unemployed because they had not searched for work in the prior 4 weeks, for the specific reason that they believed no jobs were available for them. The marginally attached (U-5 & U-6 measures) are a group that includes discouraged workers. The criteria for the marginally attached are the same as for discouraged workers, with the exception that any reason could have been cited for the lack of job search in the prior 4 weeks. Persons employed part time for economic reasons (U-6 measure) are those working less than 35 hours per week who want to work full time, are available to do so, & gave an economic reason (their hours had been cut back or they were unable to find a full-time job) for working part time The six state measures are based on the same definitions as those published for the United States: U-1, persons unemployed 15 weeks or longer, as a percent of the civilian labor force; U-2, job losers & persons who completed temporary jobs, as a percent of the civilian labor force; U-3, total unemployed, as a percent of the civilian labor force (this is the definition used for the official unemployment rate); U-4, total unemployed plus discouraged workers, as a percent of the civilian labor force plus discouraged workers; U-5, total unemployed, plus discouraged workers, plus all other marginally attached workers, as a percent of the civilian labor force plus all marginally attached workers; & U-6, total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all marginally attached workers. U3 = Official unemployment rate Note: Rates are at a 4-quarter moving-average basis. Source: U.S. Bureau of Labor Statistics.

Diversified or Not? Nevada’s Economy Employment by Industry Nevada U.S. Source: U.S. Bureau of Labor Statistics. Analyzed by RCG.

REBUILD

Diversified or Not. , cont Diversified or Not?, cont.: Location Quotients Nevada’s Economy, Last 10 Years Mature, healthy sectors Mature sectors that are losing ground Sectors that need attention Potential up-and-coming sectors 10 Sources: U.S. Bureau of Labor Statistics. Analyzed by RCG.

SEQUESTRATION & TRANSPORTATION FUNDING

Nevada Department of Transportation Programs: FFY 2012 Enacted, (,000) Airport Improvement Program $52,637 FHWA - Bridge Replacement & Rehabilitation $18,219 FHWA - Congestion Mitigation & Air Quality $33,504 FHWA - Coordinated Border Infrastructure Program $0 FHWA - Equity Bonus $23,106 FHWA - High Priority Projects FHWA - Highway Safety Improvement Program $15,069 FHWA - Interstate Maintenance $81,451 FHWA - Metropolitan Planning $2,363 FHWA - National Highway Performance Program FHWA - National Highway System $90,486 FHWA - Railway Highway Crossings $1,027 FHWA - Safe Routes to School $1,360 FHWA - Surface Transportation Program $83,885 FHWA - Territorial & Puerto Rico Highway Programs FHWA - Transportation Alternatives FHWA - Recreational Trails $1,268 FTA - Bus & Bus Facilities $5,918 FTA - Capital Investment Grants (New Starts) FTA - Fixed Guideway Modernization FTA - Urbanized Area Formula $30,268 FTA - Nonurbanized Area Formula $4,901 FTA - Capital Assistance for the Elderly & Disabled FTA - Job Access & Reverse Commute $1,108 State & Community Highway Safety $1,868 Total $449,463 12

Nevada Department of Transportation Programs: FFY 2012 Enacted Source: 2013 FFIS Federal Funds Information for States. 13

Federal Transfers to Nevada & Impact of Sequester to Nevada Department of Transportation, (,000) Federal Transportation Transfers to Nevada: FFY 2006 – FFY 2021 Enacted Forecast After Sequester FFY = Federal Fiscal Year. Sources: 2013 FFIS Federal Funds Information for States; Analyzed by RCG Economics.

RECOVER

Nevada’s future actually looks pretty bright. Nevada Population/Employment Counts & Forecasts Sources: U.S. Bureau of Economic Analysis ; Woods & Poole.

Nevada’s future actually looks pretty bright Part 2 Nevada/U.S. Population & Employment Growth. 10-year CAAGR* 10-year CAAGR Trends Forecasts   1980 - 1990 1990 - 2000 2000 - 2010 2010 - 2020 2020 - 2030 2030 - 2040 NV Population 4.2% 5.2% 3.0% 1.7% 1.6% 1.3% NV Employment 4.5% 1.8% US Population 0.9% 1.2% 1.0% 0.8% US Employment 2.0% 0.4% *Growth rates shown are in terms of compound average annual growth rate (CAAGR), in % change. Sources: U.S. Bureau of Economic Analysis ; Woods & Poole. 17

Contact: John Restrepo 702-967-3188 jrestrepo@rcg1.com www.rcg1.com Twitter: @rcgeconomics