Local economy slogging on
JANESVILLE Its relative history might be brief, but the Gazette's quarterly survey of the local economy finally has some better news: Five of its six indicators are improved.
The Gazette launched its economic dashboard a year ago. Completely unscientific, it looks at six economic indicators for Rock County and compares them with previous quarters.
That's nine quarters of economic activity that date back to July 2009.
Strangely enough, The National Bureau of Economic Research says the "Great Recession" ended in June 2009, a month earlier, even though the bureau wasn't certain of this until September of the following year.
Still, the local economy has lagged. There have been several bright spots, but Rock County is by no means alone in its struggle for economic traction to drive out of the hole.
While county residents aren't likely to break out in "Happy Days Are Here Again," the third-quarter numbers—when compared to the second quarter—might be a reason to at least stretch out the vocal chords.
Retail sales? Up.
New vehicle registrations? Up.
Home sales and average prices? Better.
Bankruptcy filings? Down.
Foreclosure filings was the only indicator with unfavorable movement. It jumped to 276 filings in the third quarter, up from the 225 reported in the second quarter. Still, that was considerably less than the comparable third quarter 2010.
That reflects a national trend. New reports from two industry trackers show that lenders are beginning to speed up their home-repossession practice, which has been hampered due to last year's "robo-signing" scandal.
Foreclosure filings began dropping in September 2010 as major banks initiated moratoriums to deal with paperwork problems. Lenders discovered employees and affiliates had been signing thousands of foreclosure documents without properly reviewing the details of each case. The increases are an indication that foreclosures delayed by the slowdown are beginning to work their way through the system.
"While foreclosure activity in September and the third quarter continued to register well below levels from a year ago, there is evidence that this temporary downward trend is about to change direction, with foreclosure activity slowly beginning to ramp back up," said Jeff Saccacio, chief executive officer of RealtyTrac, one of the industry tracking companies.
With that exception, the local economy appears to be improving.
"I don't think we're headed for a double dip recession," said Russ Kashian, an economics professor and the director of the Fiscal and Economic Research Center at UW-Whitewater. "We're slowly plotting our way out of this, but it's a long, irritating process."
James Otterstein, Rock County's economic development manager, said the most significant local economic indicator is job growth, which right now he said could best be described by several adjectives: anemic, sluggish, weak.
He said that while the dashboard shows a drop in unemployment, there are many people who argue that the area's "true" unemployment rate is probably two or three points higher because the "official" rate does not include discouraged workers who have simply stopped looking for work.
"However … the trends reflected in the dashboard data sets are hard to argue against," he said. "Trend lines are moving in the right direction, and these movements provide signals that, at least when measured against those traditional indicators, the economy is incrementally improving."
Otterstein said he has collected data from Rock County employers in the last 18 months that support the trend lines.
Specifically, he found that 86 percent indicated they would be developing or offering new products during the next two years. Fifty-five percent said they were increasing their market share, and 57 percent expected to expand within the three years.
"While some of these projects have materialized, others remain to be determined and are subject to various factors," Otterstein said.
Continued certainty, he said, leads to increased stability.
"Increased stability, in turn, creates the necessary confidence level where businesses feel comfortable enough to make those capital deployment decisions that help facilitate the flow of income and wealth throughout the economy," Otterstein said.
Kashian said he's been impressed with Rock County's resiliency, particularly with the economic blow it sustained.
Still, he said, the recovery will be slow.
"It's kind of like when you find yourself at the bottom of a hole and you see the sun come out," he said. "You want to believe that happy days are here again.
"Things are getting better, but I'm not sure there's any great cause for celebration yet."