Q2 2012 Milwaukee, Wisconsin Commercial Real Estate Economy

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Q2 2012 Milwaukee, Wisconsin Commercial Real Estate Economy

The data on the metropolitan Milwaukee economy is mixed between renewed decline and very modest growth, as good news is nearly absent. According to Current Employment Survey (CES) data from the U.S. Bureau of Labor Statistics (BLS), total non-farm employment was 6,700 jobs (0.8%) lower in July 2012 than it had been in July 2011. Government cutbacks remain part of the reason, with the Government sector, as a whole, down by 4,900 jobs (5.5%) and Local Government down by 5,800 (8.4%). But the private sector also lost 1,800 jobs (0.2%) year-over-year despite a gain of 2,600 (2.2%) in the Manufacturing sector. Household-based data from the BLS on the number of employed residents of the Milwaukee Metropolitan Statistical Area (MSA), including the self-employed, continue to point upward, but only barely. The year-over-year increase was just 3,220 (0.4%) as of June. The labor force edged up by just 675 (0.1%) according to this source.

CES data for the latest July-to-July period points to weakness in a variety of sectors, and strong growth in none. Government fiscal problems have spilled over to the substantially government-subsidized Educational and Health Services sector, which lost 300 jobs (0.2%.) Among office-based sectors, while Professional and Business Services managed a gain of 100 jobs (0.1%), Financial Activities lost 500 (0.9%.) The employment gain of the former sector was reduced by a loss of 1,100 jobs (4.2%) in the bellwether Employment Services industry, which includes temporary workers. Among industrial sectors Transportation and Utilities gained 900 jobs (3.4%) but Wholesale Trade lost 700 (1.9%.)

Meanwhile, all sectors driven by local demand remain in a funk. Retail Trade lost 1,000 jobs (1.3%) year-over-year in July, due almost entirely by a steep loss of 900 jobs (6.0%) in the big-box Department Stores industry. The Accommodation and Food Services sector lost 2,300 jobs (3.8%). And in the long beleaguered Construction sector, a loss of 1,300 jobs (4.8%) in the year to July 2012 brought the decrease since July 2007 to nearly one-third (12,000). Milwaukee’s tool companies are not seeing much demand locally. Moody’s Economy.com projects a population gain of just 6,120 (0.4%) for 2012, with even smaller gains forecast over the next two years. Household average income was up just 1.2% from a year earlier as of the second quarter, according to this source. The National Association of Realtors reports a 0.5% year-over-year gain in the median existing home sales price as of the second quarter. At $189,700, Milwaukee’s median price remains far higher than the Midwest average of $149,400. Milwaukee’s household average income, in contrast, is about average for the Midwest.