posted on August 01, 2022
(Rock County, WI) Despite rising inflation, as well as stubborn supply chain issues, the Janesville-Beloit MSA economy posted another solid quarter. These details are highlighted in today's release of the Q2 2022 Rock Ready Index.
The area’s average annual unemployment rate continued to move incrementally downward, and this same general pattern was present at the state and federal levels too. While June's rates were somewhat elevated (i.e. reaching 4%), Q2 2022 averages were nearly identical to Q1 and in some cases - two percentage points below the figures posted for Q2 a year ago. Meanwhile, employer hiring appetites remained steady as Q2 2022 recorded another period of job postings at or above the 30,000 threshold. That said, employers of all shapes and sizes - as well as product and service mixes - are collectively feeling the acute and on-going pains associated with an extremely challenging labor market.
The average sale pricing for residential properties throughout the Janesville-Beloit MSA remained strong, as Q2 2022 figures were more than eight-percent higher than last quarter; and seven-percent higher when compared to Q2 a year ago. However, lean inventories and rising interest rates have impacted transaction volumes. For example, the number of sales for Q2 2022 were about five-percent lower than what was recorded during this same period last year. Downward trends are also surfacing in the number of new home starts too, as the data for the first half of this year are about 40% lower than what was recorded during this same period a year ago.
Similar economic brake-pumping signs were also evident in the quarterly sales and use tax collections, as the totals for Q2 2022 (at $4.6 Million) dipped slightly two-percent lower when compared to a year ago. Despite reduced consumer confidence and historically high inflation, these current quarterly collection totals were nearly 13% higher than its Q1 counterpart; and notably higher than what's been recorded for the majority of the quarters during the last 15 years. Since collections for the second half the calendar year generally outpace the first-half, it remains to be seen how deep and/or sustained the area's economic response will be from those trends that are surfacing at the national level.
From an investment and development lens, the economic development pipeline for Q2 2022 mirrored what was recorded in Q1. While the overall industry mix of the current pipeline is trending higher than its recent counterparts, the number of overall projects is lower than what has historically been associated with Q2. That said, there remains a strong back-log of projects from calendar year 2021 and 2020. Plus, there are some emerging opportunities - which are fueled by a handful of national policy conditions - that are having some pipeline influence, as well. Case in point: the quarterly average of 54.8% for the ISM Manufacturing Purchasing Managers' Index (PMI) for Q2 2022 signals there is additional investment and development momentum moving through the economy..
In response to those trends, developers such as Phoenix Investors have pushed forward and their 500,000 SF speculative development in Beloit's Gateway Business Park is the featured project in this Q2 RRI. Headquartered in Milwaukee, Phoenix has real estate holdings in 29 states that total 52 million square feet. Their Beloit project, which is on track to be delivered to the market by year-end, will have the functionality to serve as either a single-or-multi-tenant building.
The Rock Ready Index (RRI) is a quarterly economic development dashboard compiled and distributed by the Rock County Development Alliance. The RRI covers four topical areas: Workforce (Job Postings and Unemployment Rates), Real Estate (Residential, Commercial or Industrial) Trends, Sales (Tax Collection) Activities and a snapshot of the ED Pipeline's growth and/or investment opportunities. Each Index also includes a Project Profile section, which highlights project-specific news during a given quarter. For more information, visit www.RockCountyAlliance.com