Kenosha County economy soft in some areas, firm in others

While the manufacturing sector is stuck in dry dock, waterfront development, activity in the Lakeview Industrial Park is giving the economy of Kenosha County a boost.
A highlight, according to Kenosha Area Business Alliance (KABA) President John Bechler, is the Harbor Park condo/multi family development — which just turned two years old.
“So far, the owner-occupied portion is moving forward,” Bechler said. “There are 100 units sold or under offer out of a total of 250 units. Overall, both the commercial and residential sectors are strong.”
Bechler and KABA participate in the management group for the Harbor Park development and helped recruit the developer. KABA generally does not concern itself with residential development, but rather focuses on commercial and industrial development.
Bechler points to recent successes such as the grand opening of Nito-Denko’s facility in the Lakeview Corporate Park and the construction of a 650,000-square-foot warehouse in the park by Johnson Wax. Other Lakeview residents — Newcon and Rustoleum — are now leasing additional space in the park. And Newcon is planning to build an expansion.
In the Business Park of Kenosha, Centresis is in the process of adding on to its building.
“We are seeing a lot of growth of existing business and some coming from outside the area,” Bechler said. “This is the reverse of what the case was previously.”
Manufacturing slow
But regardless of the good news, the slowdown of the manufacturing economy worldwide is being felt by many employers locally.
“Manufacturing represents 12% of our employment base, and has ever since the downsizing of Chrysler,” Bechler said. “Recently, I can definitely see a reduction in backorders. Less and less, companies are indicating that they will be expanding or increasing their employment in the next six months.”
Bechler said the situation in Kenosha was somewhat related to automobile industry, but also related to the fact that many area manufacturers and other businesses are suppliers to companies engaged in heavy industry.
Robert Terwall, vice president of Cherry Electric, a manufacturer that relies on the auto industry for about half of its component sales, concurs with Bechler’s assessment, characterizing their current sales as “OK”.
“We are off last year’s record vehicle sales, but it is not that bad,” Terwall said. “But the PC market is on its ear for us. We service the telecom marketplace, and the hardware manufacturers are not cooperating with us very nicely.”
Looking for a work-around
Despite the slowdown, the Wisconsin Department of Revenue (DOR) has relatively optimistic projections for employment in the area.
DOR projections for the Kenosha area pegged nonfarm employment growth at about 2.2% for the year 2000, which marks a steep decline from a 5.3% growth rate in 1998. From 1993 to 1999, Kenosha County employment grew by 21.1%.
DOR’s figures for a forecast period from 1999 to 2005 projects that during the five-year period employment growth would be down from the previous 6-year period to about 8.2%.
But while DOR projections seem to be pointing to a slowing employment market, they are still forecasting a high number of new jobs coming to the area.
Nonfarm employment, according to DOR figures, was 45,400 in 1993, 54,970 in 1999 and a projected 59,460 by 2005.
Bechler said KABA is looking into ways the county can build new economic sectors and vitality to help the Kenosha area meet or beat those projections. Among the areas being investigated are e-commerce and retention of economic resources leaving the area through commuting.
Bechler said the area is experiencing a brain drain — not only in terms of youth moving from the area to accept jobs elsewhere — but in terms of commuting. KABA is currently engaged in a study to determine what effect commuting has on the county.
“I do know we need to do something as a state and as a region to increase the per capita income of our families and retain a larger number of our human capital that currently leaves,” Bechler said. “I would say we are experiencing a brain-drain — but you will find the same thing throughout Wisconsin. We are doing a survey of our commuters to find out why people live here and work somewhere else — and to find out what gross product we lose as a result of that.
“If I worked in downtown Chicago, how much money do I spend outside of the county of Kenosha every day? Do I shop at other places? Do I get haircuts at other places? That’s all income that is lost to this marketplace. Some people buy cars outside of the community because they want to have the car-care services where they work as opposed to where they live. We are hoping to have rough results by the end of September.”
Bechler said he also looks forward to data from a study being undertaken cooperatively with surrounding counties on the state of Web connectivity in Kenosha County.
“I think that, because we have a substantial number of small employers, our challenge is to increase their level of sophistication with regard to e-commerce, and to do that in a way that makes sure they are still competitive,” Bechler said. “I think it is key for all companies — but especially for smaller ones. General Motors is doing this with its suppliers. If you are a smaller company and not involved with the Web, you get lost in the shuffle. It affects service, retail, manufacturing — the day of going to your local bank and filling out a loan application are over.”
Bechler said that along with Racine, Walworth, Waukesha, Ozaukee, Milwaukee and Washington counties, Kenosha County is analyzing its existing high-speed Web connection infrastructure.
“First — you look where distribution currently is,” Bechler said. “Then you try to figure out where the gaps are in terms of future needs and come up with recommendations on how to fill those gaps.”
Bechler said that upon completion of the connectivity study, technical assistance and education could be made available through KABA or other regional organizations to help the Web become a profitable part of more businesses.