SOURCE: BMO Harris Bank

BMO Harris Bank

September 09, 2013 13:00 ET

Milwaukee Sees Cyclical Upturns in Housing and Factory Activity - BMO Economics

MILWAUKEE, WI--(Marketwired - Sep 9, 2013) -  

  • Manufacturing output bounces back
  • Shift from manufacturing base to service
  • Job growth remains flat

In Milwaukee, cyclical upturns in housing and factory activity are good news, and they should strengthen as the U.S. economy gains momentum later this year according to a report released today by BMO Capital Markets. 

"Our customers are voicing optimism and seeing the recovery in a positive light," said David Anderson, Managing Director, Commercial Banking, Milwaukee, BMO Harris Bank. "With our local expertise and segment knowledge, we are helping our customers find solutions as they look to invest in and upgrade their businesses."

Milwaukee's large industrial base has recovered smartly from the Great Recession. Real manufacturing output rose more than 10 percent annualized in the two years through 2011, and was on track to top pre-recession highs in 2012.

"While a diverse set of industries dot Milwaukee's economic landscape, factory activity remains the major driver of growth," said Robert Kavcic, Senior Economist, BMO Financial Group. "At 17.2 percent of economic output in 2011, Milwaukee's manufacturing sector is proportionately one of the largest among major Great Lakes cities being home to the likes of Harley Davidson, Rockwell Automation and Johnson Controls."

Milwaukee was largely immune to the worst of the housing bubble and bust that plagued many southern cities, but the severity of the economic downturn still had a significant impact on the local housing market. According to the FHFA Home Price Index, home prices in the city fell 14 percent peak-to-trough, before bottoming in late 2012, versus the 18 percent decline recorded nationally. The subsequent rebound has similarly been less robust, but prices do appear to have bottomed out.

Job growth remains fairly flat in Milwaukee, averaging a 0.7 percent year-over-year pace through the first 7 months of 2013, though roughly half of the jobs lost during the recession have now been recouped. At 7.2 percent, the unemployment rate remains slightly below the national average. According to Kavcic, "Looking ahead, the city can be reasonably expected to add about 15,000 jobs by the end of 2016, pulling the jobless rate down to 6 percent."

Professional-service employment is the clear area of strength in the city, up nearly 3 percent year-over-year to record levels. Notably, this sector now employs just 1,000 fewer than the manufacturing sector as Milwaukee has seen firm growth in the broader service sector.

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 Banksm 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.

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