You’re hearing the R-Word used when people talk about business in 2008.
Some are predicting the American economy is entering a recession while others are saying that is too severe of a forecast and just slower growth will occur. Factors like high fuel costs, the weak dollar, mortgage foreclosures, high credit card debt, government spending on the war in Iraq are mega-factors that can’t be complete escaped, in Western Wisconsin or anywhere else.
But, the economy in the Western Wisconsin region looks to be diverse enough, and business people are wise enough, to avoid any disastrous downfall.
First, the farm economy looks relatively strong, and that still is a driving force in the region’s economy. Corn growers had a good year in 2007, in part because of the demand for corn in the making of ethanol. That should continue in 2008.
The growth of organic farming and niche agribusiness products also helps to shield the region’s farm economy from some of the factors that are devastating the rural economy in other parts of the country which might be dependent on one crop or product.
Real estate markets have not plummeted as severely as in some other areas. Housing costs in the region never rose to the heights they did in some areas, but also are not falling as dramatically. Foreclosures are up in the region, but again not as alarming as in other areas.
In La Crosse, the start of work on a new transit center and a new downtown hotel, the completion of the second Riverside Center office building by Logistics Health Inc., the completion of the church at the Shrine of Our Lady of Guadalupe, S&S Cycle’s 50th anniversary celebration and other projects and events should pump dollars into the local economy in 2008.
Projects in Eau Claire and other larger communities in the region also will help their local economies. Some smaller towns have suffered losses of retail and other businesses, but several have redevelopment plans in place or in the works.
The region also has some service industries that are more shielded from bad times than manufacturing. Doug Granchalek of the La Crosse Chamber of Commerce recently told the La Crosse Tribune that continued strong demand for health care, “which is largely not impacted by those outside forces,” helps an area which has seen considerable growth in health care facilities. Service companies such as Logistics Health continue to do well, Granchalek said.
Manufacturing in the region is somewhat slow — as it is in the country and state. For the first time since data has been kept, Wisconsin could dip below 500,000 jobs in manufacturing. But, innovative manufacturing, such as S&S, Phillips Plastic and others, are doing well in the Western Wisconsin region.
As fellow WisBusiness.com columnist Tom Still wrote last year: “A regional approach to economic development, cooperation between education and industry, and a commitment to innovation are reasons why this region is prospering.”
Passage of an Upper Mississippi River financial bill will lead to repair and construction of improved locks on the river and some environmental restoration. That should help both commerce and tourism on the river.
While all this seems relatively positive, experts still are not painting an unrealistic rosy picture. The La Crosse metropolitan area’s unemployment rate averaged 4.2 percent for the first 11 months of 2007, up slightly from 3.9 percent for the same period a year earlier. Experts believe it will average around 4.3 to 4.4 percent in 2008.
Unemployment in the Eau Claire area has ranged around 4 to 4.5% and will continue to hang around those numbers in 2008, according to most forecasts. You’d like to see those figures lower, but they are not rising at an alarming rate.
More things could still be done to help insulate the region from negative trends over time. The area could use more rail and bus service to reduce the reliance on automobiles. Ideally, these services could be fueled by alternative sources.
Rural areas need additional and faster connections to the internet, so business can be done from virtually anywhere in the region. An overall sustainable approach to economic growth can be increased.
These are long range approaches, which will take years to develop and implement. But, for the short term, Western Wisconsin will not completely escape the national trend of an economic downturn, but it also should not feel the effects as severely as some other areas.
