MMAC economic indicators still slowly rising

Milwaukee area economic indicators rose slightly in March as 12 of 23 local
indicators tracked monthly by the Metropolitan Milwaukee Association of Commerce improved from year-ago levels.

March’s performance improved from February’s 11 upward-pointing indicators.

“The local economy has struggled to get a firm footing through 2014’s first three months,” said Bret Mayborne, the MMAC’s economic research director. “The slow start to 2014 is largely the result of a lackluster employment situation with year-over-year job gains in the last two months averaging less than half that registered in 2013.”

Highlights of the report include:

• Small year-over-year job increases continued in the metro Milwaukee area. Nonfarm employment averaged 818,400 in March, a 0.3 percent increase from one year ago – following the 0.4 percent gain posted in February.

• The majority of major industry sectors (six of ten) registered year-over-year job declines in March. The financial activities sector posted the largest decrease – down 3 percent vs. year-ago levels. Conversely, four of ten major industry sectors posted employment gains with a 4.5 percent increase in the education & health services sector ranking as the biggest percentage rise.

• Air passenger activity at General Mitchell International Airport has improved in recent months over weak year-ago levels. Passenger levels rose 5.1 percent in March (vs. one year ago), this indicator’s third year-over-year increase in four months.

Despite the weak overall job trend, unemployment indicators in the metro area posted continuing improvement in March. The number of unemployed fell by 5,800 from one year ago (down 9.5 percent) leading to a 0.8 percentage point fall in the seasonally unadjusted unemployment rate (vs. March, 2013). Metro Milwaukee’s rate averaged 6.9 percent in March, slightly higher than the 6.7 percent and 6.8 percent rates posted for the state and nation respectively.

New unemployment compensation claims in the metro area fell 13.9 percent in March (vs. March 2013), to 4,166. New claims have fallen on a year-over-year basis in all but four of the past 29 months.

Nonfarm employment levels in the metro area averaged 814,400 in March, down 0.3 percent from year-ago levels. March’s 0.3 percent gain ranks below the 0.4 percent increase posted in February and marks the fourth time in the past five months that year-over-year job growth of less than 1 percent has been recorded.

March employment declines were posted in six of ten major industry sectors. The steepest decline was posted in the financial activities sector, down 3 percent, followed by the leisure & hospitality (down 2.3 percent), professional & business services (down 1.7 percent), trade, transportation & utilities (down 0.9 percent), information (down 0.7 percent), and manufacturing (down 0.6 percent) sectors.

Job gains were concentrated in four major industry sectors. The education & health services sector posted the largest gain in percentage terms with a 4.5 percent increase over year-ago levels. The government (up 2.8 percent), other services (up 1.4 percent), and construction, mining and natural resources (up 0.9 percent) sectors also posted employment gains.

Among manufacturing production worker indicators, the length of the average workweek dropped 6.6 percent in March, to 41.3 hours – this indicator’s fifth consecutive year-over-year decrease. Average weekly earnings for such workers fell 1.3 percent (to $776), while average hourly earnings rose at a 5.6 percent pace (to $18.80).

Both Milwaukee area housing and real estate indicators tracked by the MMAC pointed downward in March. Existing home sales for the metro area fell 15.5 percent, to 994, after falling 12.1 percent in February – this indicator’s first back-to-back declines since June, 2011. Mortgages recorded in Milwaukee County posted a 43.2 percent decrease, to 1,505 – down against year-ago levels for the eighth consecutive month.

New-car registrations in the metro area rose 10 percent in March over year-ago levels, to 2,960. March’s increase follows the 2.2 percent increase posted in February and marks this indicator’s
strongest gain in six months. Air passengers using Mitchell International Airport posted back-to-back months of increase for the first time since May, 2011. The 5.1 percent increase in March, to 631,843, comes after the 1.1 percent gain posted in February.

The value of signed construction contracts, as reported by F.W. Dodge for February, was $77 million, down 22.3 percent from February, 2013.

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