The Wausau area economy registered impressive gains in a number of categories during the fourth quarter of 1987. An example is the substantial rise in the number of employed. However, local and national economic indicators are signalling that growth during 1988 may be slower and more difficult to achieve.

     At the national level leading economic indicators have been down three consecutive months. While this does not necessarily mean that a recession will occur, it should at least give rise to serious concern about the health and direction of the national economy. Locally there is some evidence that 1988 will not be a repeat of 1987, which was characterized by rather impressive gains in employment.

     An analysis of leading economic indicators for the area, reveals the following information. First, regional business executives are very positive about their industries. Second, retailers are indicating that they are less optimistic than in the past. Third, help wanted advertising remains strong, but the rate of increase has declined. Fourth, after analyzing the data, residential construction activity was actually down from last year. Fifth, nonresidential construction activity has remained at approximately the same level for the past three years. Finally, financial statistics indicate that activity during fourth quarter 1987 was down when compared to the previous year.

     Table 7 gives Marathon County employment by sector. All classifications recorded impressive gains in employment except for government. Manufacturing displayed the largest amount of growth with 1100 new positions. The lower dollar has stimulated manufacturing at the national level and also appears to be having a positive impact locally. Manufacturing is at a record high level for the fourth quarter time period. Services and trade employment have had an impressive year. These sectors posted higher levels of employment than in any other quarter since the CWERB began tracking the situation. Overall, total sector employment exploded upward by nearly 60/0 or 2700 positions.

     Retailer confidence for Wausau is displayed in Table 8. The response level for total sales compared to previous years is the second lowest ever recorded over the past 15 quarters. Thus retailers have indicated that while sales were better than last year, the rate of increase was minimal. Store traffic was lower than in September. These results suggest that the fourth quarter 1987 fell short of retailers' expectations and could signal a further 'slow down. Supporting this are the response levels of retailers for expected sales and store traffic three months from now. The levels are significantly below last quarter's and show that retailer confidence has been shaken. As a matter of record, these levels are the least optimistic of any period recorded by the CWERB.?

     The help wanted advertising index is a measure of local labor demand (Table 9). The index for December 1987 stood at 224. This is the highest level ever recorded for December and it represents a 16% increase over last year. However, it should be noted that it was the lowest yearly increase in the past three years. This data can be interpreted to mean that while demand remained high, the rate of growth has slowed. Furthermore, it is not likely that county payrolls will expand as rapidly in early 1988 as they did in the first part of 1987.

     Table 10 and Table 11 present data on local family financial distress. The fourth quarter saw dramatic improvements in the total caseload and the number of new applications for public assistance. Unemployment claims, both initial and total, were down sharply from a year ago. This indicates that local conditions have improved over the year. However, the numbers also show that there are still individuals and families in our community who, for a variety of reasons, have not been able to participate in local economic prosperity.

     Residential construction activity is highlighted in Table 12. The data in this table indicate a dramatic increase in the estimated value of new homes and in the number of housing units. One large project for elderly citizens accounted for over 70070 of the estimated value of new homes and 82% of the number of units. Thus, the rise in residential construction is qualified by this event. Moreover, residential permits were down by 7 from December 1986. On the positive side, residential alteration permits and the estimated value of residential alterations were substantially above the previous year. In summary, if the large housing project is excluded from the numbers, it can be seen that new residential construction was down from a year ago. This corresponds to what was taking place in housing at the national level during fourth quarter 1987.

     Nonresidential construction continued to add to the local capital stock. Table 13 shows that the activity level of fourth quarter 1987 was generally at the same level as in fourth quarter 1986. Furthermore, the 1987 results are not dramatically different from 1985.

      Financial statistics for the Wausau area are listed in Table 14. Bank deposits are virtually unchanged from last year, whereas bank loan activity was down by nearly $17 million. This data may reflect a slow down in economic activity. Furthermore, the decrease during this quarter will have a dampening effect on future quarters. Specifically, the local economy could be entering a period of slow growth.