Wisconsin will continue to grow in 2008

Despite ongoing concerns about the housing market and the possibility of higher inflation, the consensus among economists is that the nation will avoid a recession and continue to see economic growth during 2008.

Here in Wisconsin, we’re showing particular resiliency: we’ve escaped the worst of the sub-prime mortgage debacle. And, the weak dollar that is causing some worry among the experts actually may be producing some benefits for our state. The decline of the dollar is contributing to a surge in exports, with overseas sales of U.S. manufactured goods rising 18.9 percent during the third quarter alone, according to the U.S. Commerce Department.

These numbers are good news for Wisconsin, which ranks ninth in the nation based on the number of manufacturing plants, and where manufacturing accounts for about 18 percent of total employment. Action by the Federal Reserve to again lower interest rates means this relatively weak dollar — and the opportunity to further boost manufacturing exports — may be with us for some time.

Given these trends, it makes sense for Wisconsin residents to express a sense of optimism about their employment prospects for the year ahead. A recent Wood Communications Group Checkpoint Survey shows nearly two out of three (65.1%) state residents feel positively about the job opportunities available for themselves and their family members in the year ahead.

The Checkpoint economic and public affairs survey of 400 state residents was conducted Nov. 29-Dec. 4 and carries a margin of error of plus or minus 5 percentage points.

Statewide, more than one in five residents (21.8%) say they are “very positive” about the job outlook, while another two in five (43.3%) say they are “somewhat positive

Lest state and private sector leaders become tempted towards complacency, however, the Checkpoint survey does reveal some challenges ahead.

Specifically, although Wisconsin families are bullish on the outlook for jobs, they are clearly concerned about their potential wages and whether their household income will keep pace with inflation. This concern likely reflects the fact that over the past two decades, Wisconsin residents have seen their earning power erode in comparison with key neighboring states. For example, our per capita income now lags Minnesota by about $4,000 per year.

The Checkpoint survey shows that well over half of state residents (55.8%) anticipate their wages and other household income earnings will not keep pace with inflation in the year ahead. More than one in three (34.5%) expect their income will rise less quickly than inflation while more than one in five (21.3%) believe their wages or other income will actually decline from this year’s level.

Equally telling is that fewer than one in 10 state residents (9.8%) say they expect pay increases or other income to outpace inflation during the coming 12 months. A total of 31.5 percent say their income will just stay even with inflation while about 3 percent are unsure.

The good news for policy makers and the business community is that state residents are ready and willing to support economic development solutions that address this core issue of earning power and the need for better paying jobs. The public sense of urgency is conveyed in the strength of responses to questions about the best strategies for economic development.

For example, when given the chance to rate the importance of five economic development strategies, more than two-thirds of the Checkpoint respondents assigned the highest level of importance to all five. Economic development policies that emphasize investing in education to improve the knowledge and skill base of our work force received the most intense support, with 72.3 percent of respondents saying the strategy is of the highest importance.

Policies to support entrepreneurs (68.5%) and advocate for restraint in government spending (68.3%) also scored highly in state residents’ minds. In addition, more than two-thirds of respondents indicated that strategies promoting the state’s quality of life (67.3%) and fostering the success of existing business (67%) are highly important to the future of the state.

Sereno, former business editor of the Wisconsin State Journal, is a senior manager at Wood Communications Group in Madison. E-mail jenny.sereno@wcgpr.com or call (608) 770-8084.