TUESDAY, FEBRUARY 23, 2016
FIFTH ANNUAL
ECONOMIC OUTLOOK
Today’s program is moderated by Dr. Taggert J. Brooks, Chair of the Department of Economics at UW - La Crosse. Dr. Brooks reviews results from the annual regional economic outlook survey and provides comparisons to state and national trends, with an emphasis on business expansion. Dr. Brooks is joined by a panel of experts on the factors related to business expansion in the Wausau region. This panel will answer questions about what is anticipated in 2016 and what can be done to improve them and grow the local economy.
Employment/Labor Market Marathon County Seasonally Adjusted Monthly Unemployment Rate 12
Actual data Seasonally adjusted data
There are signs of tightening in the local labor market as is evidenced by the low unemployment rate, despite the fact that the level of employment reported by establishments remains below the pre-recession peak.
9
6
3
1990
1995
2000
2005
2010
2015
Bureau of Labor Statistics
Marathon County: Employment 70,000
60,000
50,000
40,000
1985
1990
1995
2000
2005
2010
United States Census Bureau
Percentage of Organizations with Employment Ahead of the Previous Year
30
20
10
0 2011
2012
2013
2014
2015
Percentage of Organizations Who Rate Availability of Qualified Workers as Good or Excellent 40
30
20
10
0 2011
2012
2013
2014
2015
Job growth has been rather slow with fewer than 40% of organizations reporting an increase in employment over the previous year. Despite slow growth in employment, local organizations have clearly experienced challenges when it comes to finding qualified workers. Fewer than 20% report the availability of qualified workers as Good or Excellent, down from over 40% immediately after the recession. Business Survey Reports from the Wausau Region Chamber of Commerce
Business Sales, Profits and Capital Investment Percentage of Organizations with Gross Sales Ahead of the Previous Year Percentage of Organizations Planning Local Capital Expansion
40
20
20
0 2011
2012
2013
2014
2015
Percentage of Organizations with Profits Ahead of the Previous Year
10
0 2011
2012
2013
2014
2015
50
2014 was a better year for gross sales and profits relative to the previous year.
40
30
20
10
0 2011
2012
2013
2014
2015
2015 suggests fewer firms are ahead when compared to last year. Importantly, however, there has been a large increase in firms looking to reinvest in the community with plans for capital expansion by nearly 30 percent of the respondents. Business Survey Reports from the Wausau Region Chamber of Commerce
Are the Following Business Factors (1) More Favorable, (5) Less Favorable or (3) About the Same as Factors Your Direct Competitors Face in Other Communities? Availability of Credit
Availability of Skilled Labor
Availability of Unskilled Labor
Cost of Credit
Employee Health Care Costs
Environmental Regulations
Local Taxes
Technical Training Programs
Wage Rates
Worker Productivity
Worker Stability
60% 40% 20% 0%
60% 40% 20% 0%
60% 40% 20% 0%
60% 40% 20% 0%
1
2
3
4
5
1
2
3
4
5
This series of questions from the recent survey highlights areas where local businesses think they have advantages and disadvantages over their competitors. Responses of (1) and (2) suggest more favorable conditions in the local community relative to their competitors, while (4) and (5) suggest less favorable conditions for each factor. Organizations identify challenges in the areas of availability of skilled labor and, to a lesser extent, unskilled labor. Employee health care costs and local taxes are also less favorable than in competitor’s communities. Areas where the local community appears more favorable to organizations relative to their competitors are in wage rates, technical training programs, worker productivity and the availability of credit. Business Survey Reports from the Wausau Region Chamber of Commerce
Marathon County: Number of Establishments 3,600
3,400
The number of establishments in the county continues to fall, but with rising employment at these firms beginning after 2010, it implies establishment size has been increasing.
3,200
3,000
2,800
1985
1990
1995
2000
2005
2010
Marathon County: Small Establishments (<10 employees) as Percentage of all Establishments The proportion of small establishments as a percentage of all establishments has been falling since the mid-1980s.
74%
72%
70%
68%
United States Census Bureau 1985
1990
1995
2000
2005
2010
Consumer Sentiment and Wages 120
Consumer Sentiment Index
90
Region 60
Marathon County National
30
0 Consumer Sentiment
Current Conditions
Expectations
Comparing regional consumer sentiment to national trends suggests Marathon County is running ahead of the national sentiment in all categories - overall, current and future expectations. University of Michigan Consumer Sentiment Survey
Marathon County: Average Annual Wages Part of the explanation might lie with the fact that average annual wages have generally increased in recent years after pulling back in the recession.
Thousands
35
30
25
United States Census Bureau 20
1985
1990
1995
2000
2005
2010
Housing Market
Median Home Prices: Marathon County Actual data Smoothing filter applied
The housing market continues its slow pace of recovery. The liquidity in the market as measured by the number of sales reported by the Wisconsin Relators Association has returned to levels seen at the start of the recession, while the median sales price continues to rise, searching for the previous peak.
$140,000
$120,000
$100,000
2008
2010
2012
2014
2016
Number of Home Sales Per Month: Marathon County 160
120
80
40
Wisconsin Realtors Association 2008
2010
2012
2014
2016
Regional Airport Enplanements Index CWA
EAU
LSE
MSN
MSP
RST
120
100
80
120
100
80
2000
2005
2010
2000
2005
2010
2000
2005
2010
Central Wisconsin Airport (CWA) along with regional airports in La Crosse (LSE) and Rochester, MN (RST) have struggled to maintain the number of passengers they had in 2000. Minneapolis (MSP) and Eau Claire (EAU) have seen modest gains and Madison (MSN) has seen much larger gains. While people travel for more than business reasons, and supply issues, such as the number of carriers and times of flights can have a dramatic impact on these data, they are still possibly indicative of general economic activity. Federal Aviation Administration
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