The Wisconsin economy is expanding at a somewhat sluggish pace and has struggled to gather any sustained momentum given declining factory activity, according to the State Monitor report released today by BMO Capital Markets Economics.
Wisconsin’s real GDP will likely expand 1.2 percent this year, up marginally from 1.1 percent registered last year, according to the report.
Wisconsin’s exports growth slowed to 4.2 percent in the second quarter, the coolest pace since the end of 2009, as machinery and electronic equipment shipments have leveled off alongside softer global demand. In the meantime, the Milwaukee PMI rebounded in September, but continues to point to contracting factory activity.
“While the economy is growing at a slower pace than expected, our commercial customers continue to express optimism and confidence in the state’s economic resiliency,” said Jeff Ticknor, managing director and head of diversified industries, Wisconsin, 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 and continues to sport a below-average foreclosure rate of 3.2 percent. Home prices have begun to stabilize.
“Wisconsin’s fiscal situation remains relatively favorable, with the shortfall at a below-average 11 percent of budget and a fully-funded pension liability,” said Sherry Cooper, chief economist, BMO Financial Group. “Employment has stagnated but the jobless rate remains at 7.3 percent as of September, well below the national average.”
Manufacturing continues to gradually add jobs despite slipping in July, while wholesale trade, education and health care are seeing solid growth. While Wisconsin’s housing market was not nearly as hard-hit as other states, construction and real estate employment continues to plunge in the state, the report said.