For the purpose of this report, Central Wisconsin is defined as Portage, Marathon and Wood Counties. Information on regional unemployment rates, total employment, employ­ment by sector and employment by industry is contained in Tables 2-5. Table 6 is based on a survey of major business executives in the three county area.

     Central Wisconsin unemployment rates are well below the double digit figures prevail­ing a year ago (Table 2). The December regional unemployment rate stood at 8.0%, down 2.8% from the end of 1983. Portage County registered the lowest jobless rate (7.4%), with Wood (8.0%) and Marathon County (8.5%) following closely. All rates are seasonally unadjusted. The order among the counties is unchanged from the third quarter.

     Gains in employment are becoming much more difficult as the economic expansion matures (Table 3). The number of jobs in Wisconsin is only .1% above the 1983 total. The slight drop in Marathon County employment (-.1%) can be partially attributed to excess capacity in manufacturing and a weak dairy industry. Both problems also plague the state as a whole. In the Central Wisconsin region, only Portage County exhibited a solid employ­ment growth rate, posting a 5.8% gain.

     Marathon County appears to be mirroring a statewide labor force phenomenon. Two factors are acting to generate unusual labor market conditions. The State of Wisconsin and Marathon County have experienced measured labor force declines in the past year. A reduction in the labor force has allowed the state and the county to post sizeable declines in their respective unemployment rates with virtually no gains in employment.

     There are several possible explanations for the decline in the labor force. One possibility is out-migration. Population estimates for the state and Marathon County have recently been well below projections. On the positive side, a declining labor force may be suggesting that prime age male heads of household are returning to higher paying jobs. Higher wages for the head of household allows other family members to leave the labor force. More complete data is required to provide a full explanation of this important development.

     A second unusual factor influencing the state and regional labor market can be seen upon closer examination of the Department of Industry, Labor and Human Relations employment statistics. Nonagricultural wage and salary employment rose 3.9% in Marathon County and 2.9% for Wisconsin over the past year. Therefore, employment declines are being registered in the agricultural and self employment categories. Certainly the agricultural sector has suffered through a difficult year, yet in terms of employment this sector is rela­tively small. A likely further explanation is the complications associated with measuring this segment of the labor force. Small firms and farms are difficult for the state's statisticians to pinpoint and estimate their employment.

     Breaking the Central Wisconsin economy into its major sectors reveals employment gains across the board (Table 4). A trend noted in previous reports continues. Manu­facturing payrolls are growing at a decreasing rate, while the trade and service sectors are adding jobs at an accelerating pace. Construction employment, always down in the winter months, is well above the December 1983 level. Nonresidential construction in Portage County continues to fuel growth in this sector.

     Employment gains in Central Wisconsin's key industries have generally been modest (Table 5). Only the paper industry grew significantly, boosting payrolls 11%. Minor gains were recorded in lumber and financial services, while food processing employment is down slightly. In one respect, below trend employment growth in these established industries is reflecting a positive development. New industries, by growing at a faster rate, are adding diversity and stability to the regional economy.

     Regional business executives reported a mild deterioration in national and local economic conditions in the last six months (Table 6). The business confidence index slipped below 50 for the first time in 1984. A reading below 50 indicates that executives feel the economy has weakened. However, projecting ahead six months, business leaders anticipate a mild improvement in both local and national conditions. When asked about their respective industries, executives were strongly optimistic, pushing the index up to 66.