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Dennis K. Winters Chief, Office of Economic Advisors Wisconsin Department of Workforce Development

WISCONSIN’S CONSTRUCTION OUTLOOK. 2013 Winter Convention. Dennis K. Winters Chief, Office of Economic Advisors Wisconsin Department of Workforce Development. February 8, 2013. FIRST OF ALL, YOU NEED TO UNDERSTAND WISCONSIN’S ECONOMY. THE ECONOMY HAS CHANGED AND SO MUST YOU.

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Dennis K. Winters Chief, Office of Economic Advisors Wisconsin Department of Workforce Development

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  1. WISCONSIN’S CONSTRUCTION OUTLOOK 2013 Winter Convention Dennis K. Winters Chief, Office of Economic Advisors Wisconsin Department of Workforce Development February 8, 2013

  2. FIRST OF ALL, YOU NEED TOUNDERSTAND WISCONSIN’S ECONOMY

  3. THE ECONOMY HAS CHANGED AND SO MUST YOU

  4. ECONOMIC RECOVERYHOW IS THIS ONE NOT LIKE THE OTHER ONES 4

  5. JOBS RECOVERYHOW IS THIS ONE NOT LIKE THE OTHER ONES

  6. ECONOMIC OUTLOOK

  7. BUSINESS CYCLE SEVEREIT TOOK NINE QUARTERS TO RECOVER Recovered Source: BEA, OEA

  8. REAL EARNINGS ARE FLAT

  9. INTEREST INCOME TAKE HIT WITH LOW INTEREST RATES

  10. HOME EQUITY WAS USED FOR CONSUMPTION NOW PART OF DELEVERAGING

  11. REVOLVING CREDIT WAS USED FOR CONSUMPTION NOW PART OF DELEVERAGING 11 11 Source: Federal Reserve Board of Governors

  12. NO SAVINGS – WAS USED FOR CONSUMPTION NOW PART OF DELEVERAGING 12 12

  13. It is difficult to increase consumption when you: have stagnant income, are losing wealth, paying down debt, increasing savings, and are paying more for food and gas.

  14. CORPORATE PROFITS AT NEW RECORDS MOSTLY DUE TO COST CUTTING

  15. MANAGING RISK WHERE IS THE INCENTIVE TO EXPAND

  16. CORPORATE PROFITS BUILDING CASH HOARD 16

  17. INVESTMENT GROWTHIS IN PRODUCTIVITY, NOT EXPANSION Source: BEA, OEA

  18. EXTENDING CREDIT BANKS ARE RETICENT TO LEND FUNDS Reserves of Depository Institutions (billions of dollars) Source: Federal Reserve Bank of St. Louis, Economic Research; OEA

  19. JOBS RECOVERYOUR BEST ESTIMATES PUT THE BREACH AT MAY 2015 Breach May 2015

  20. VEHICLE SALES CONTINUE STRONG

  21. HOUSING STARTS TRENDING HIGHER

  22. WISCONSIN HOUSING STARTS HOPEFULLY NOT A HEAD FAKE Wisconsin Housing Starts (thousands) Source: U.S. Census

  23. ARE THE GOOD DAYS GONE FOREVER?

  24. ARE THE GOOD DAYS GONE? PROBABLY FOR RESIDENTIAL Source: U.S. Census

  25. OUCH ! Total New Construction Spending ( $ billions ) Source: Wisconsin Department of Revenue, Real Estate Value Data

  26. Source: BEA, OEA

  27. OUCH ! AGAIN Wisconsin Employment Through Recession Source: U.S. Bureau of Labor Statistics, QCEW

  28. OUCH ! YET AGAIN Wisconsin Construction Establishments Through Recession Source: U.S. Bureau of Labor Statistics, QCEW

  29. CHANGE IN REPRESENTATION UNION v. MERIT SHOPS Source: U.S. Census; CPS-MORG

  30. So, what will be the biggest socio-economic policy challenge in the next 20 years?

  31. ELDERLY NUMBERS WILL SWELLWIDEN THE SIDEWALKS WILL YA !?

  32. OR PERHAPS THE MORE INTERGENERATIONAL VERSION

  33. QUANTITY

  34. WISCONSIN’S WORKFORCE GROWTHBECOMES FLAT Source: Bureau of Labor Statistics, OEA

  35. BLS RAISED LFPR FOR THE FUTUREPARTICULARLY FOR OLDER COHORTS Source: Bureau of Labor Statistics, Bureau of the Census, OEA

  36. WISCONSIN’S WORKFORCE HIGHER LFPRs OFFER LIMITED GAINS Source: Bureau of Labor Statistics, OEA

  37. LITTLE CHANGES EVEN WITH HIGHER LFPR RETIREMENTS SWAMP PARTICIPATION Source: Bureau of the Census, DOA, OEA

  38. NURSING WORKFORCE IN WISCONSINDEMOGRAPHICS AT WORK Source: Office of Economic Advisors

  39. POPULATION PARTICIPATION FUNCTION OF RECESSION SEVERITY

  40. WORKFORCE PARTICIPATION TRENDS DWARF FLUCUATION

  41. IT’S THE YOUNG THAT ARE DELAYINGENTERING THE WORKFORCE

  42. CHANGING LFPR GREATLY ALTERS WORKER AGE MIX

  43. QUALITY

  44. NEW ECONOMYNEED FOR SKILLS "The days are over when you could walk into a paper mill with a high school diploma and run one of the machines." – Patrick Schillinger, former Wisconsin Paper Council President,Center will teach paper-industry technology, Milwaukee Journal Sentinel, JS Online, October 21, 2004.

  45. TURN YOU LOOSE ON THIS BABY I DON’T THINK SO

  46. NEW ECONOMYSCARCITY OF SKILLED WORKERS Former Federal Reserve Chairman Alan Greenspan voiced his concern about a growing earnings gap between highly skilled and unskilled workers. "It's a problem caused basically by our skill mix not keeping up with the technology that our capital stock requires," the Fed chairman said. . . . 48

  47. Unprecedented – we have never faced a declining workforce before; Assured – demographics will change little; Largely unalterable – demographics and migration patterns do not change abruptly. WORKFORCE TRENDSARE:

  48. Potentially devastating – without sufficient productivity gains the state’s economy will stagnate; Necessitating a focus on talent – large investments in education and training are needed; Requiring match – talent supply and industry demand must be matched or you lose both. RAMIFICATIONS OF WORKFORCE TRENDSARE:

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