The Wisconsin economy is making headway with steady signs of recovery as we start off 2014. Wisconsin’s unemployment rate declined to 5.9% for March, a decrease of 1.3 percentage points (pp) from a year ago and still remains below the national unemployment rate of 6.7%.
The southeastern Wisconsin and northern Illinois manufacturing sector is growing, but the growth, when compared to the national trends, has been volatile over the past six months. The Institute of Supply Management Report on Manufacturing, scored the Milwaukee metro area at 56.03 for March 2014, indicating positive growth. Since September 2013, the index has been above 50 for six of the seven months, but in February the index dipped to 48.9. A score in excess of 50 indicates growth as a measure of new orders, production, employment, supplier deliveries and inventories in the manufacturing industry. With the manufacturing measure showing growth, those surveyed had “guarded optimism” that the economy would continue to improve.
CONTINUED POSITIVE ABSORPTION
For the 15th consecutive quarter, the Milwaukee industrial market experienced positive overall absorption, with 92,566 square feet (sf) absorbed in Q1 2014. However, unlike prior quarters, two of the four Milwaukee submarkets experienced negative absorption, with Waukesha County being the only submarket with positive absorption, at 131,151 sf. With only slight positive absorption, the vacancy rate remained the same quarter-over-quarter at 6.7%.
DEVELOPMENT ACTIVITY ON THE RISE
With Wisconsin’s pro-business mentality and a proactive economic development corporation, southeastern Wisconsin has seen a rise in industrial build-to-suit and speculative development as well as business park creations. In Kenosha County, there are three proposed business park slated for development, totaling over 911 acres between Majestic Realty Co., Venture One Real Estate, and Bridge Development Partners LLC’s proposals. In the Racine County market, three developers are evaluating new business park opportunities, including Majestic Realty Co.’s planned 57-acre business park, Jon Hendersen Real Estate Inc.’s proposed 36-acre business park, and Land and Lakes Development Company’s proposed 60-acre business park. In Milwaukee County, Wispark LLC has plans for a 220 acre business park in Oak Creek and in Washington County the Village of Germantown and MLG Development have a proposed 192-acre business park in consideration.
Wisconsin has been hard at work enacting pro-business policies to attract and maintain manufacturers to the state. As a result of private-sector job growth and creating a budget surplus for the State, Wisconsin is in a good position as we continue on into 2014 for more big wins for the State.
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