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Economic growth in the Sauk Prairie area, Sauk County and the rest of the state will continue to grow in 2019, but more slowly. That is the prediction of Dr. Steven Deller, an economist and professor of Agriculture and Applied Economics at University of Wisconsin-Madison and Community Development Economist with UW-Extension.

Deller provided the economic forecast on Feb. 20 at the River Arts Center for the bank of Prairie du Sac’s annual Economic Outlook event.

Wisconsin’s economy largely depends on manufacturing, which is why the state’s recovery from the recession has been much slower than the rest of the U.S.

“Take a look at Michigan,” Deller said. “Its economy is jumping all over the place because it depends heavily on the automotive manufacturing industry. Are they dependent on it? The economic indicators say yes.”

Moving forward Wisconsin needs to diversify its industry and address shortages in the labor force.

“We keep telling our kids they have to go to college in order to be successful,” Deller said. “It certainly helps, but it isn’t necessarily true. And as a result, we have fewer young adults going into the trades.”

Because of that, Deller said, even if developers want to build, they don’t have the labor force to keep up with the demand.

Deller said fellow economists are still trying to determine how the three-week federal shutdown will impact the country’s overall economy and what impact President Trump’s trade tariff policies will have on business investments.

One of the seemingly hardest hit areas is in agriculture, because so many farmers depend on USDA loans. “With the USDA shut down, they now have a backlog,” Deller said. “We have farmers with serious cash flow problems and that has created a lot of uncertainty in the agriculture industry.”

Also, Deller said, a 25 percent tariff on German automobiles could negatively impact not only the U.S. automobile industry, but the overall economy as well.

Soybeans – one of Wisconsin’s larger cash crops – has also been hit with trade tariffs imposed on China. “China was one of the biggest buyers of soybeans but the soybean market has crashed,” Deller said. “These tariffs do have a significant impact on the U.S. economy.”

Some of the other forecasting Deller offered is a projected “uptick in the unemployment rate” later in 2019. And a recent survey of economists showed one-in-four believe there is a chance of another recession in 2020.

Student debt continues to be a problem nationally, and is creating a bottleneck in the economy. “Recent graduates can’t afford to buy a car let alone a house and definitely not start a business due to too much debt,” Deller said.

Locally, the Sauk Prairie area is having a strong year in terms of business growth, said Sauk Prairie Chamber of Commerce Executive Director Tywana German.

In addition to Deller’s synopsis, German and Chamber board member Dave Johnson of the First Weber Group delivered the 2019 business report, while leaders from the village of Prairie du Sac, Sauk City, town and village of Merrimac as well as the Sauk Prairie School District provided attendees with community updates.

Sauk City saw the opening of 11 new businesses in addition to several business expansions. Merrimac saw the opening of three businesses in the village, and the town had four. The number of building permits issued in Prairie du Sac has gone down slightly, but both Sauk City and Prairie du Sac are experiencing some residential growth with a redevelopment project in Sauk City and additions to existing developments in Prairie du Sac. Also both communities are embarking on major park projects in conjunction with the Great Sauk State Trail and riverfront access.

Johnson said the community has to work on a solution to its lack of workforce housing, especially in Prairie du Sac. In Prairie du Sac, rent for a two-bedroom, two-bath apartment runs $1,100-$1,200 – an average of $200-$300 more than the rest of Sauk County. Johnson said renters and homebuyers preferring stand-alone duplexes, and want a three bedroom, two-bath home for $200,000-$250,000. Millennials are seeking out communities where apartment complexes offer a range of amenities, such as garages, gyms, and easy access to community amenities.

“People like teachers, police officers and firefighters need workforce housing,” Johnson said. “Many who would like to live in the community they work can’t because they are priced out.”

That was a sentiment echoed by Wright, who said the median annual salary for all staff (minus administrators) is just over $50,000. “In order to be able to afford to rent a place with a monthly payment of $1,400, they would have to make $56,000. And while many of our staff would like to live in our community, they are living in places like Baraboo and Reedsburg.”

With limited land available for development, the cost to purchase land is high. And because the cost of materials has also increased, developers are having difficulty building workforce housing, which is in high demand.

“A rising tide lifts all ships,” Johnson said. “If we can provide people with workforce housing … (it will have a positive overall effect on the community.)”

German said she and other leaders are looking to the community for solutions. “This is an emergency for our community,” German said. “We need investment opportunities to address this. And we need land owners who are willing to work with us.”

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