Way back in July 2008, at a time when many were proclaiming that the fundamentals of the economy were sound, BizTimes Milwaukee was among the first to warn its readers that an economic downturn had begun and it was going to get worse.
In our most recent cover story, we stepped out again ahead of the curve with the pronouncement that a strong economic recovery has begun.
That pronouncement raised more than a few eyebrows. Was it premature? I suppose that is possible. But we documented strong economic data to support this conclusion. Home sales are up. Car sales are up. Temporary hiring is up. Factory orders are up. Retail sales are up. Milwaukee’s airport passenger traffic is up. Mergers and acquisitions activity is up. The stock market is up.
We also cited some anecdotal observations that are pertinent to the bigger picture. Schneider National Inc. in Green Bay is hiring 2,500 new truck drivers to meet the rising demand of goods that are being produced.
Public relations offices in Milwaukee are buzzing with more activity, as companies express their pent-up demands for marketing new products and services.
Local companies such as Generac Holdings Inc., Douglas Dynamics Inc. and Quad/Graphics Inc. are confident enough in the market that they have launched initial public stock offerings. That was not happening in the darkest hours of the Great Recession.
We’re encouraged by even more economic data and reports in the past week that have bolstered our case that a recovery has begun:
- New home sales surged 27 percent across the nation in March, the indicator’s largest monthly gain since April 1963, according to the latest data from the U.S. Commerce Department. The March sales of 411,000 new homes far surpassed February’s record low, which was revised to 324,000.
- The National Association of Realtors (NAR) reported that existing home sales rose 6.8 percent in March.
- The U.S. Labor Department reported that claims for unemployment insurance fell by 24,000 last week.
- The world economy is rebounding from recession "better than we thought likely" and will expand by more than 4 percent this year, according to Olivier Blanchard, the International Monetary Fund’s top economist. "A global depression has been averted. The world economy is recovering and recovering better than we thought likely," Blanchard said.
- The U.S. economy continues to recover, according to the index of leading economic indicators tracked by the Conference Board. The Conference Board said its index rose 1.4 percent in March, marking its 12th consecutive monthly gain. In March, seven of the 10 leading indicators were positive: the interest rate spread; average weekly manufacturing hours; index of supplier deliveries; stock prices; building permits; average weekly initial claims for unemployment insurance and manufacturers’ new orders for consumer goods and materials.
- The Dow Jones Industrial Average and Nasdaq Composite Index have climbed for eight consecutive weeks. That’s the market’s most impressive streak since 2004.
- The fourth annual Energy Efficiency Indicator by Johnson Controls Inc. predicts that more investments will be made in energy efficiency in commercial buildings in 2010. The survey of more than 1,400 North American executives and managers responsible for making investments and managing energy in commercial buildings found that planned investment in energy efficiency is expected to rebound in 2010.
In addition to the macroeconomic numbers, we’re also noting some encouraging microeconomic trends:
- General Motors Co. announced it has repaid $8.1 billion in loans it received from the U.S. and Canadian governments five years ahead of schedule.
- Ford Motor Co. reported a first-quarter profit of $2.1 billion.
- Milwaukee-based Manpower Inc. reported first quarter net earnings of $2.8 million, or 4 cents per share, which was an improvement from a net loss of $1.8 million, or 2 cents per share, in the same period a year earlier. The company’s quarterly revenues grew 13 percent to $4.1 billion.
- The Triad Group Inc., a manufacturer of over-the-counter pharmaceutical products, plans to consolidate its operations into Hartland by October, adding about 100 new jobs to its 300,000-square-foot Wisconsin plant.
Now, let’s be straight up here. There will be more hiccups along the way. It won’t be a straight arrow upward to prosperity. The banking industry is still on shaky ground and is not lending enough to fuel an even more robust rebound. Furthermore, commercial real estate development remains on ice.
And the last number to move in the recovery will be the unemployment rate, which always lags in a recovery. If you have been laid off or you are under-employed, you have every reason to be skeptical.
Still, the fundamentals of the economy are picking up steam. The recovery won’t be as deep or fast as any of us would like. But things are moving in the right direction.
Hope to see you at the BizTech Conference and Expo this week, where we will collectively try to add to that momentum.
Steve Jagler is executive editor of BizTimes Milwaukee.
