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

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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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