Fed official: Tech tide lifts boats in Nevada
Economic benefits seen from likes of Facebook
Nevadans shouldn’t kick themselves if they missed the massive rally in so-called FANG stocks.
They are still benefiting economically from the rise of technology giants like Facebook, Amazon, Netflix and Google (FANG), according to one of the nation’s senior banking officials.
The companies, now some of the largest in the U.S. by market capitalization, have been expanding rapidly, attracting tech professionals to their swanky new headquarters in the Bay Area and Seattle. That has driven up housing prices, pushing companies and individuals to relocate to Nevada.
“These companies are the foundation of a lot of this growth. They are the big employees, the ones driving of a lot of the income and housing demand,” said John C. Williams, president and CEO of the Federal Reserve Bank of San Francisco, during a visit to
Las Vegas on Thursday.
Williams oversees the Twelfth Federal Reserve District, which includes Alaska, Arizona, California, Hawaii, Idaho, Nevada, Oregon, Utah and Washington. He travels frequently to cities and towns in his region to speak with businessmen and take the pulse of local economies.
Williams said employers sometimes tell him they are relocating parts of their business from the West Coast to other states in his district to cut costs affecting their competitiveness. High housing costs are gener- ally the main problem, he said.
This trend can continue as the FANG companies and other large technology players are generating strong profits. That was not the case during the dot-com bubble of the late 1990s and early 2000s.
“These are companies that are making things people want. They have a successful business model, so I think there is a big difference from the dot-com bubble,” Williams said.
Even if FANG growth peters out, Williams sees another technology-driven sector that could result in significant investments in the Nevada economy in the coming years. And this one is a lot closer to home than Silicon Valley.
“I personally believe that we are the cusp of a trend toward significant increases in renewable energy in terms of solar, wind and hydro,” said Williams. ”For that to be successful, we need to have a lot of infrastructure.”
Increased investment in infrastructure is one of the keys to unlocking higher, sustained economic growth in the coming years, he said.
Williams toured Henderson on Thursday, visiting the Pittman neighborhood, the Water Street District, Boulder Highway Corridor and the emerging medical district before speaking to faculty and students at UNLV that evening.
Williams said talk of a local housing price boom and worker shortage reminds him a bit of the heyday of the 2000s. However, he said he doesn’t think the Southern Nevada economy is overheating.
“I am not saying we are there yet. I don’t think the economy is in that type of situation, but it’s interesting to watch whether this recovery turns into excessive optimism,” he said.
Contact Todd Prince at tprince@ reviewjournal.com or 702-3830386. Follow @toddprincetv on Twitter.