economic outlook 2016
Post on 25-Jul-2016
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T U E S D A Y , F E B R U A R Y 2 3 , 2 0 1 6
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.
FIFTH ANNUALECONOMIC OUTLOOK
3
6
9
12
1990 1995 2000 2005 2010 2015
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.
Bureau of Labor Statistics
United States Census Bureau
40,000
50,000
60,000
70,000
1985 1990 1995 2000 2005 2010
Marathon County SeasonallyAdjusted Monthly Unemployment Rate
Marathon County: Employment
Actual dataSeasonally adjusted data
Employment/Labor Market
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
0
10
20
30
2011 2012 2013 2014 2015
0
10
20
30
40
2011 2012 2013 2014 2015
Percentage of Organizations withEmployment Ahead of the Previous Year
Percentage of Organizations Who RateAvailability of Qualified Workers as Good or Excellent
2014 was a better year for gross sales and profits relative to the previous year.
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
0
20
40
2011 2012 2013 2014 2015
0
10
20
30
40
50
2011 2012 2013 2014 2015
0
10
20
2011 2012 2013 2014 2015
Percentage of Organizations withGross Sales Ahead of the Previous Year
Percentage of Organizations withProfits Ahead of the Previous Year
Percentage of OrganizationsPlanning Local Capital Expansion
Business Sales, Profits and Capital Investment
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
0%20%40%60%
0%20%40%60%
0%20%40%60%
0%20%40%60%
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
Are the Following Business Factors (1) More Favorable, (5) Less Favorableor (3) About the Same as Factors Your Direct Competitors Face in Other Communities?
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.
The proportion of small establishments as a percentage of all establishments has been falling since the mid-1980s.
United States Census Bureau
2,800
3,000
3,200
3,400
3,600
1985 1990 1995 2000 2005 2010
68%
70%
72%
74%
1985 1990 1995 2000 2005 2010
Marathon County: Number of Establishments
Marathon County: Small Establishments(<10 employees) as Percentage of all Establishments
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 Senti-ment Survey
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.
United States Census Bureau
0
30
60
90
120
ConsumerSentiment
CurrentConditions
Expectations
RegionMarathon County
National
20
25
30
35
1985 1990 1995 2000 2005 2010
Thou
sand
s
Consumer Sentiment
Index
Marathon County: Average Annual Wages
Consumer Sentiment and Wages
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.
Wisconsin Realtors Association
$100,000
$120,000
$140,000
2008 2010 2012 2014 2016
40
80
120
160
2008 2010 2012 2014 2016
Median Home Prices: Marathon County
Actual dataSmoothing filter applied
Number of Home Sales Per Month: Marathon County
Housing Market
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
CWA EAU LSE
MSN MSP RST
80
100
120
80
100
120
2000 2005 2010 2000 2005 2010 2000 2005 2010
Regional Airport Enplanements Index
Member FDIC
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