Welcome!
Welcome to the winter 2020 issue of the ICB Economic Update, a quarterly newsletter from Investors Community Bank to help you stay current on economic conditions in Central Wisconsin.
Fourth Quarter Summary
The Central Wisconsin economy continued the gradual decline that started earlier this year in the fourth quarter 2019. The theme of this quarter’s indicators is caution. Employment growth in the region continued to decline on an annualized basis and unemployment has continued to creep upwards. Employers are currently seeking candidates for more than 9,000 active openings in a highly competitive marketplace while labor market availability remains near historic lows. This illustrates the dissonance that persists across many of the region’s key economic indicators.
The outlook for 2020 remains cautiously optimistic as recessionary concerns have grown. Annualized GDP growth of 2.3 percent in 2019 represents a near-term low and industrial inventories have decreased each of the past five months. Recent trade deals with China and the ratification of the USMCA should provide some stability, but ongoing tensions with the EU and the resolution of Brexit portend rocky waters ahead. The near-term domestic outlook remains bullish with unemployment and inflation as we enter into a critical election year.
Annualized Employment Growth
January 2016 - December 2019
- Growth patterns have diverged since September 2017 with statewide employment growth joining regional trends by decreasing on an annualized basis in the past quarter.
- Regional employment growth has averaged a 2.6 percent annualized rate since 2015.
- Employment growth has decelerated significantly in recent months as both the manufacturing and construction sectors bow to trade pressures.
Source: Current Employment Statistics Program, U.S. Bureau of Labor Statistics, January 2020
Monthly Unemployment Rate
January 2010 - December 2019
- Growth patterns have diverged since September 2017 with statewide employment growth joining regional trends by decreasing on an annualized basis in the past quarter.
- Regional employment growth has averaged a 2.6 percent annualized rate since 2015.
- Employment growth has decelerated significantly in recent months as both the manufacturing and construction sectors bow to trade pressures.
Source: Local Area Unemployment Statistics, U.S. Bureau of Labor Statistics, January 2020
Total Unfilled Job Vacancies for the United States 2010 - 2019
- Unfilled vacancies nationally have flattened in the last half of 2019 as trade pressures and demographic shifts have depressed hiring.
- Current average duration of 48 days marks a two-year high, suggesting that employers have considerably more difficulty locating talent and are scaling back their recruiting efforts.
- Greatest demand continues to exist in the health care and logistics industries.
- Average wage on offer has increased 2.8 percent YTD. This represents a near-term increase of 0.3 percent since Q4, reflecting both increasing wage pressures as well as greater availability of higher-income occupations.
Source: Organization for Economic Cooperation and Development, December 2019
Industrial Commodities Snapshot
- Industrial commodity price indices increased by nearly 18 percent YTD, or 28 percent above 2017 benchmarks.
- Recent daily metal markets have become increasingly volatile over the past year due to ongoing trade tensions with China and the European Union. The recent Phase 1 agreement with China has added some bilateral certainty but the slowing of global markets continues as a result of constrained supply.
- Commodity pricing increases continue to impact production costs and product availability especially in iron and steel-intensive industries. This has been noted both by suppliers and producers throughout the region as domestic production has yet to increase.
Source: TradingEconomies, January 2020
New Housing Starts - December 2019 Annualized Change
- New housing starts have increased more rapidly than total valuation regionally while struggling statewide.
- A mild early winter season has allowed construction in many communities, though activity and interest remain generally low.
- Labor constraints in the industry continue to delay projects and extend deadlines.
Source: Building and Construction Survey, U.S. Census Bureau, December 2019
Want more business news and information?
The new ICB Business Banking web page is your one-stop-shop for all things related to business banking solutions.
The business experiences and relevant insights of our seasoned business banking team make them uniquely capable of helping solve a wide range of complex business challenges. Many of these topics are covered via articles our bankers have personally written for the page.
It’s also the place to go for the latest deposit rates and information on loans, cash management options, fraud prevention and much more.
Click here to visit the ICB Business Banking web page.
Views provided in this newsletter are general in nature for your consideration and are not legal, tax, or investment advice. Investors Community Bank (ICB) makes no warranties as to accuracy or completeness of information, including but not limited to information provided by third parties, does not endorse any non-ICB companies, products, or services described here, and takes no liability for your use of this information. Information and suggestions regarding business risk management and safeguards do not necessarily represent ICB’s business practices or experience. Please contact your own legal, tax, or financial advisors regarding your specific business needs before taking any action based upon this information.
