The Wisconsin economic momentum continues to show slow and steady improvement. Wisconsin’s unemployment rate declined to 5.7% for May, a decrease of 0.1 percentage points (pp) from the prior month and 1.1 pp decrease from a year ago and still remains below the national unemployment rate of 6.3%.
The Institute of Supply Management Report on Manufacturing, scored the Milwaukee metro area at 63.49 for May 2014, indicating positive growth. A score in excess of 50 indicates growth as a measure of new orders, production, employment, supplier deliveries and inventories in the manufacturing industry.
The Milwaukee region was one of 12 areas, selected from a group of 70 across the country, named “Manufacturing Communities.” This special designation allows the 12 areas to receive preferential consideration for up to $1.3 billion in federal grant money. With this classification, it gives our area the opportunity to continue grow our economy, increase our workforce, and have a positive impact on our state.
CONTINUED POSITIVE ABSORPTION
For the 16th consecutive quarter, the Milwaukee industrial market experienced positive overall absorption, with 364,598 square feet (sf) absorbed year-to-date. Three of the four counties experienced positive absorption in Q2 2014. Milwaukee County experienced the most absorption for the quarter, with over 380,000 sf absorbed, while the Waukesha County submarket experiencing negative absorption, mostly in part to American TV vacating the distribution center. In addition to overall positive absorption, the vacancy rate continued to decline, with Q2 2014 posting a slight decrease to 6.6%, marking a 0.7-percentage-point decrease year-over-year.
CONSTRUCTION ACTIVITY ON THE RISE
The four county Milwaukee Metro area delivered over 625,000 sf in the second quarter of 2014, the highest level seen since 2008. In addition, the construction pipeline is at the highest level since pre-Great Recession levels, another positive sign that the economy is on the upswing. In Southeastern Wisconsin, there is currently 6.3 million square feet of industrial space under construction, of which 1.1 million is speculative development. Local and out of state developers have Wisconsin on their speculative development radar, as Zilber Property Group, HSA Commercial, CenterPoint Properties, Liberty Property Trust, Majestic Realty Group, Land and Lakes
With the U.S. Department of Commerce’s announcement that Wisconsin was named one of the 12 “manufacturing communities,” momentum is in the state’s favor for continued growth and recovery. Economic indicators and positive industrial activity point to another great year for Wisconsin.
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