The Wisconsin economy is expanding at a moderate pace, but has struggled to gather any sustained momentum given cooling factory activity, according to the State Monitor report released by BMO Capital Markets Economics.
However, January data suggests the soft patch could be in the past which would help real GDP growth, the report stated.
State exports growth slowed to 3.4 percent in the third quarter, the coolest pace since late 2009, as machinery shipments leveled off alongside softer global demand. In the meantime, the Milwaukee Purchase Managers Index (PMI) jumped back into expansion territory in December and January, pointing to improved activity ahead.
“While the economy is growing at a moderate pace, our commercial customers continue to express optimism and confidence in the state’s economic resiliency,” said Jeff Ticknor, managing director for commercial banking in Wisconsin for Chicago-based BMO Harris Bank. “Our local expertise, sector knowledge and mid-market focus are real advantages to helping our customers find solutions as they invest and upgrade their businesses.”
Wisconsin was not nearly as affected by the housing bubble as many other parts of the country, with prices falling 10 percent versus 18 percent nationally. Prices have stabilized, with the index barely below prior-year levels in the fourth quarter. Home inventory is still elevated in Madison and Milwaukee in the third quarter, but well down from peak levels.
Wisconsin’s 6.7 percent unemployment rate remains below the 7.9 percent national average.
“Overall, Wisconsin’s labor market is mixed, but still ranks comfortably above average on the wide range of metrics,” said Doug Porter, chief economist of BMO Financial Group. “Relatively low unemployment appears to be driving solid wage growth, but employment in sectors like construction and finance remain a fraction of pre-recession levels.”