(Rock County, WI) Despite another pandemic-impacted year, the Janesville-Beloit MSA economy posted a very strong quarter. As a matter of fact, several new quarterly and year-end records were set. Details regarding these milestones are covered in this week’s release of the Q4 2021 Rock Ready Index.
The area’s unemployment rate continued to move downward; and this trend was present at the county, state and federal levels – particularly during the second half of 2021. In Q4, these rates averaged 2.5%, 2.1% and 4%, respectively. From the calendar year lens, Rock County’s average unemployment rate was 4.3%: two percentage points lower than the federal rate and six-tenths of a percentage point above the statewide rate. Whether attributed to recalibrated data or other pandemic-related factors, these rates continued to reflect an extremely competitive labor market. Interestingly enough, the Q4 regional job posting figure was the lowest among the same time periods dating back to YR 2015. While some observers point to employer fatigue, others suggest the decline is attributed to pandemic-enhanced, industry sector seasonality. Nonetheless, local hiring demand remained steady as the number of job openings found on www.JobsInRockCounty.com averaged 450 during Q4.
Housing prices, for Q4 and for the entire year, set new pricing records. The YOY Median Sale Price (MSP) for 2021 was 6.5% higher than 2020 at $208,322. December 2021, in particular, reached the highest ever monthly MSP ($219,465) and Average Sale Price ($239,546) recorded for the Janesville-Beloit MSA. Similar pricing trends, particularly for December 2021, were present at the statewide, regional and national levels too. New home starts throughout the county continued to climb in 2021, as the number of permits issued were 5.5% higher than the previous year; and more than 27% above the county’s five-year, new home starts averages.
The County’s sales and use tax collections established a new quarterly record ($4.71 million), by posting nearly an 11% gain compared to the same quarter a year ago. In terms of year-end collections, Rock County‘s 2021 totals exceeded $18.1 Million: a new, all-time record high and nearly 14% higher than the 2020 collections. During the last five years, these collections have averaged about a 6.5% increase each year. While the month of November marked the highest retail sales month on record for the nation, locally September was the prize-winning month. Even despite the highest inflation rates for the U.S. in 40-years, local spending patterns in Q4 suggested that consumer confidence levels remained above normal.
Overall, the economic development pipeline for Q4 was noticeably stronger than its 2020 counterpart – and most of the pipeline was representative of projects that were searching for locations to accommodate production and distribution activities within the same footprint or campus. As a result, the year-end SF, jobs and capital investment figures for 2021 were higher than the annual averages dating back to 2017. While there was a modest 7.2% increase realized in the SF category, the largest gains were attributed to the capital investment values – which were nearly double the five-year averages and about three times greater than the amounts recorded during 2020. According to data released by the Manufacturing Purchasing Managers’ Index (PMI), the composite PMI rating for Q4 2021 was 60.2 and the year-end average was 60.7. A PMI rating greater than 50 serves as an industrial expansion indicator. In addition, the national vacancy rate for industrial / warehousing space in Q4 reached an all-time, record low at 3.7%. Based on these data points, as well as what’s been trending locally, it’s no wonder that approximately 75% of the construction activity in the U.S. industrial/warehousing market during 2021 was for speculative buildings.
Lastly, the featured Q4 economic development project is Beloit-based Welders Supply Company – which has been in business for nearly 85 years. Growth, as well as operational and capacity considerations, facilitated this family-owned and operated company to purchase and retrofit an existing building. Not only does this project serve as an example of a successful business retention and expansion project, but also an adaptive, real estate reuse case study. In addition, this project highlights how niche market opportunities drive growth. Case in point: the demand for dry ice from the food/beverage and pharmaceutical sectors has competitively positioned Welders Supply as a critical input into those industry sector supply chains.
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.