Wisconsin Economic Outlook

1
Wisconsin Economic Outlook
December 2007
Wisconsin Department of Revenue Division of
Research and Policy
2
Wisconsin Economic Growth

• The Wisconsin economy is holding up in the midst
  of the housing market slowdown, credit crunch and
  high oil prices.
• Wisconsin personal income rose 5.3 in 2006 and
  should maintain steady growth
• Wisconsin Employment grew 0.7 in 2006 and should
  grow 0.5 in 2007.

3
WI Employment Growth Improving

• Wisconsin total employment had been growing less
  than the U.S. until mid 2007.
• Since mid year, Wisconsin employment has
  strengthened, adding an average of close to
  23,000 jobs per month.
• Employment should grow 0.5 in all of 2007 and
  0.9 in 2008, about the same as the US.

4
Wisconsin Employment Growth by Industry

• Job growth in the services sectors is supporting
  private employment growth.
• Over the past three years, national manufacturing
  employment continues its declining trend with the
  loss of 114,670 jobs. In the same time Wisconsin
  posted a gain of 2,260 jobs.

5
Wisconsin personal income growth continues
outperforming the region

• Revised Wisconsin total personal income grew
  3.9 in 2004, 4.1 in 2005, and 5.3 in 2006.
• In 2006, Wisconsin personal income grew 5.3,
  just below Illinois (5.9) but above that of
  Indiana (5.1), Michigan (3.2), and Ohio (4.4).
  

6
Wisconsin Personal Income and Wages

• Wisconsin personal income is expected to grow a
  healthy 5.2 in 2007, before experiencing a
  deceleration in 2008 with 4.0 growth. The
  national forecast calls for a 6.5 growth of U.S.
  personal income in 2007 and 4.9 in 2008. By the
  end of 2008, Wisconsin income growth should
  nearly match US.
• The share of wage and salary disbursements to
  total personal income has been declining since
  2000. However, the share of Wisconsin wages
  didnt fall as much as in the rest of the
  country.

7
WI Housing Healthier than the U.S.

• Wisconsin Housing was not a strong participant in
  the housing bubble as seen in other states. As
  result, the correction will not be as strong
  here.
• Wisconsin permits show recent signs of
  stabilization, after seven quarters of continuous
  decline.
• Construction employment decreased 0.2 last year
  and is expected to decline 1.7 this year and
  2.7 in 2008.

8
Wisconsin Home Prices Holding Up
US Average 1.9 Wisconsin 2.5

• OFHEO reports declining home prices in 10 states
  but an average gain of 1.9 nation wide. The
  report for Wisconsin (2.5) is consistent with
  Wisconsin Realtors Association estimates (2.4).