News Releases

Wisconsin Economy Continues Moderate Expansion-BMO Economics

• Strong manufacturing recovery losing steam; better signs in early 2013
• Labor market in relatively good shape

MILWAUKEE, (March 5, 2013) – The Wisconsin economy is expanding at a moderate pace, but has struggled to gather any sustained momentum given cooling factory activity, according to the State Monitor report released today by BMO Capital Markets Economics. However, January data suggest the soft patch could be in the past which would help real GDP growth.

Exports growth slowed to 3.4% in Q3, the coolest pace since late 2009, as machinery shipments have leveled off alongside softer global demand. In the meantime, the Milwaukee PMI jumped back into expansion territory in December and January, pointing to improved activity ahead.

“While the economy is growing at a moderate pace, our commercial customers continue to express optimism and confidence in the state’s economic resiliency,” said Jeff Ticknor, Managing Director for Commercial Banking in Wisconsin, BMO Harris Bank. “Our local expertise, sector knowledge and mid-market focus are real advantages to helping our customers find solutions as they invest and upgrade their businesses".

Wisconsin was not nearly as affected by the housing bubble as many other parts of the country, with prices falling 10% peak-to-through as measured by the FHFA index, versus 18% nationally. Prices have stabilized, with the index barely below prior-year levels in Q4. Home inventory is still elevated in Madison and Milwaukee in Q3, but well down from peak levels.

Nonfarm payrolls were up 0.3% year-over-year in December, trailing the 1.6% year-over-year gain recorded nationally. However, at 6.7% the unemployment rate remains below the 7.9% national average, but has fallen 0.4ppts in the past year.

"Overall, Wisconsin's labor market is mixed, but still ranks comfortably above average on the wide range of metrics," said Doug Porter, Chief Economist, BMO Financial Group. "Relatively low unemployment appears to be driving solid wage growth, but employment in sectors like construction and finance remain a fraction of pre-recession levels".

Manufacturing continues to grow up 1.7% year-over-year and about 6% above the recession lows. Professional-service employment sits near record levels, and while still depressed construction employment rose in the last four months of 2012. Financial-sector employment has declined down 1.3% year-over-year in January.

The full State Monitor report can be downloaded at www.bmocm.com/economics.

About BMO Harris Bank
Based in Chicago, BMO Harris Bank N.A. provides a broad range of personal banking products and solutions through over 600 branches and approximately 1,300 ATMs in Illinois, Wisconsin, Indiana, Kansas, Missouri, Minnesota, Nevada, Arizona and Florida. BMO Harris Bank's commercial banking team provides a combination of sector expertise, local knowledge and mid-market focus throughout the U.S. Deposit and loan products and services provided by BMO Harris Bank N.A. Member FDIC. BMO Harris Bank^SM is a trade name used by BMO Harris Bank N.A. BMO Harris Bank is part of BMO Financial Group, a North American financial organization with 1,600 branches, and a retail deposit base of approximately $180 billion.