posted on August 19, 2020
(Rock County, WI) According to the Q2 2020 release of the Rock Ready Index, the economy of the Janesville-Beloit MSA continues to exhibit strengths – even in the midst of the pandemic. Details regarding these trends are highlighted below.
While COVID-19 has definitely elevated unemployment rates, those numbers are slowly beginning to decline. For the first half of 2020, there was a stark contrast between the rates: Q2's rates were basically three times higher than Q1, with the largest spikes recorded during the months of April and May. The silver lining, though, is that these rates should continue to push downward. Whether these rates settle back into the five percent (or lower) range remain TBD. Nonetheless, employers that were fortunate to remain fully-staffed during the pandemic’s first wave, also represent the same group of businesses that were experiencing pre-COVID labor pressures. Consequently, there's a healthy supply of regional job openings connected to the logistics and manufacturing sectors, respectively.
The surge in local housing prices remained very strong, as the first half of 2020 established pricing records. As a matter of fact, Q2’s average sale ($193,097) and median sale ($176,333) prices represent new, all-time high price points for the county. Compared to the same time period in 2019, Q2’s average sale prices were six percent higher; and 15% above what was recorded in 2018. Nationally, housing starts increased by almost 23% during the month of June. Meanwhile, the number of permits issued throughout the Janesville-Beloit MSA for new, single-family homes is trending more than 40% higher than a year ago.
The County’s sales and use tax collections for Q2 established a new benchmark at $3.58 Million – representing about a seven percent increase over the same time frame a year ago. This outcome isn’t necessarily a surprise, as nationally Q2 recorded two straight months of increased retail spending - with June posting nearly an 8.5% increase. Whether area consumers continue to spend as briskly throughout the remainder of 2020 remains questionable. Nevertheless, preliminary data suggests that countywide sales tax collections might remain consistent enough to reach or exceed the $15 Million threshold by year-end. Reaching this milestone, however, will not be achievable if the economy were to be subjected to another round of strict, COVID-related public health mandates.
Without a doubt, the pandemic definitely impacted the activity level within the economic development pipeline - particularly in terms of activity volume. Case in point: the number of projects were about 50% lower than what's been historically recorded in the first six months of the year during the last decade. These same types of general activity trends were happening throughout the nation, as well. The notable exceptions, of course, were projects tied to certain industrial and logistics investments - such as food processing and e-commerce. Nationally, more than 90% of the new industrial buildings under construction in 2020 represent warehouse / distribution product.
Despite this decline in local volume, the quality (as defined by total square footage, employment forecasts and capital investment projections) remains relatively on par with Q2 data from previous years. Once an adequate level of economic certainty and stability resurfaces nationally, the pent-up demand for capital expenditures and (industrial / warehousing) real estate is anticipated to be sizable. Proactively planning and positioning for this upside will most certainly help define a community's or region's (post-COVID) economic trajectory.
The Q2 RRI featured economic development project is Beloit's future addition to its downtown: a new home for the Class A affiliate of the Oakland A's minor league baseball team. Slated to open in 2021, the stadium will provide top-notch fan amenities during the season and offer an array of available uses for non-baseball activities throughout the year. This $32+ million dollar investment will further enhance Beloit's commitment to redeveloping and investing in properties that are located in the Rock River corridor.
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.