Wisconsin’s unemployment rate declined to 4.6% for May, a decrease of 0.2 percentage point (pp) from the prior month and 0.9 pp decrease from a year ago. The 4.6% unemployment rate remains lower than the national unemployment rate of 5.5%.
The Institute of Supply Management Report on Manufacturing scored Wisconsin and Northern Illinois at 46.55 for June 2015, indicating a contraction outlook. A score below 50 demonstrates reduction as a measure of new orders, production, employment, supplier deliveries and inventories in the manufacturing industry. This is the third consecutive month that the outlook has indicated negative trending. Manufacturers have shifted the six-month outlook on business conditions downward compared with May. Of those surveyed, only 43% expect positive growth in the coming months, while 18% believe conditions will worsen in upcoming months.
CONTINUED POSITIVE ABSORPTION
For the 20th consecutive quarter, the Milwaukee industrial market experienced positive overall absorption, with over 923,899 square feet (sf) absorbed in the second quarter alone. This represents a slight increase from Q1 2015 and nearly 1.8 million square feet (msf) absorbed during the first two quarters. All four counties experienced positive absorption in Q2 2015. Milwaukee County captured the majority of absorption for the quarter, with over 824,078 sf absorbed. In addition to overall positive absorption, the overall vacancy rate continued to decline, with Q2 2015 posting a 0.5-pp decrease quarter-over-quarter to 5.1%, marking a 1.5-pp decrease year-over-year.
CONSTRUCTION ACTIVITY ON THE RISE
Construction activity in Milwaukee’s industrial market is on the rise. The region’s low vacancy rate has spurred multiple built-to-suit and speculative developments. Many local developers are continuing to be bullish about the market. MSI General Corp has announced plans to construct a 158,000-sf industrial headquarters in Menomonee Falls, Briohn plans to develop a 16.5-acre industrial park in Pewaukee, and James Luterbach Construction Co also announced plans for a 72,000-sf facility in New Berlin.
The U.S. and Wisconsin economies continue to gain momentum throughout 2015. Although business owners remain cautious in their outlook, the economy is showing job growth and positive industrial absorption. The Wisconsin industrial market is poised to finish the last two quarters of 2015 in strong fashion.
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