Slowing local economic conditions which
began to appear in the second half of last year spilled over into the first
quarter of 1986. Negative readings showed up in the employment, residential
construction, bank loan activity and unemployment claim indicators. However,
some signs of growing strength are evident. Tables 7-13 contain data on the
Stevens Point area's economic
performance. These tables are based on information reflecting the local
labor, construction and financial markets.
Manufacturing and government were the only sectors reporting gains in the
local economy, as overall employment dipped in Portage County (Table
7). Manufacturing employment stands well above last year's substantially
revised downward figure. Small payroll gains appear in the lumber,
nonelectrical machinery, food processing and paper industries. High
enrollment at the University of Wisconsin-Stevens Point accounts for the
rise in government employment.
The local economy's other two major sectors continued to exhibit weakness on
a year-to-year comparison basis. Service employment, hurt by payroll
reductions in the transportation and financial services industries,
plummeted 10.4%. Dislocation in the central business district continued to
plague the trade sector, as total trade employment dropped 5.5%. Weakness in
these two important sectors is the key reason for the local economy's loss
of steam over the last nine months.
A new indicator designed to measure local retailer confidence makes its
debut in this report (Table 8). Interpretation of the
survey, which consists of 25 respondents, is difficult at this point because
there is no previous observation for comparison purposes. The index is based
on the same scoring system used for measuring regional business confidence
and some conclusions can be drawn. After seasonal adjustment retailers
reported moderate gains in March for total sales and store traffic when
compared to six months earlier. Expectations six months hence are strongly
positive. The index value for expected sales stands at 70 versus the current
sales reading of 55. Local retailers are clearly anticipating improving
conditions.
Labor demand in the local economy showed growing strength in the first
quarter (Table 9). The volume
of help wanted advertising stands well above the seasonally adjusted 1985
level. The rising index points to improving second and third quarter labor
market conditions.
A major change in the administration of local public assistance claims has
reduced the short run usefulness of Table 10 but
should make it a more valuable indicator when comparisons are possible.
Claims are now processed at a central office designed to serve all of
Portage
County. Initially this change will
inflate the number of claims but eventually make it a better measure of
local financial stress.
Unemployment claims rose 13.1 % from the first quarter 1985 reading (Table
11). The indicator is a measure of current conditions and is signaling
that there was slack in the first quarter local labor market.
Despite sharply lower long term interest rates, the local residential
construction numbers proved to be a disappointment (Table
12). The number of new permits and estimated value of homes were
slightly below comparable figures recorded a year ago. Lower mortgage rates
have sparked a surge in home owner refinancing but have not yet translated
into stronger new construction activity. Spring weather and continued low
interest rates should spur new building in the months ahead.
Winter weather held nonresidential
construction to a low level during the first quarter (Table 13). However,
major remodeling permits filed by Woodward Governor and Consolidated Papers
pushed the value of alterations above $5 million. These projects will add
strength to the local economy in the months ahead.
Financial statistics collected from
Portage
County's four largest
commercial banks were mixed (Table 14). Bank deposits
rose sharply during the quarter and now stand at 15.0% above the March 1985
level. On the other hand, bank loans slipped 1.5% during the quarter and are
currently only slightly above the year earlier figure, A jump in bank
deposits is often a signal of future increases in consumer spending and
business loan activity.
