The Milwaukee-Waukesha metro area has an overall grade of C+ with a composite score ranking it 42.8th percentile out of 50 US metros. This city's economic character is most defined by its low labor demand, with a composite score in the bottom tier, and its tight unemployment market, with a rate of 3.20% ranking it in the top tier. The labor demand and unemployment metrics signal a challenging environment for businesses looking to hire and expand.

Labor Demand

The employment growth rate in Milwaukee-Waukesha is -0.86% year-over-year, and weekly hours are deviating -0.000% from the city's own 12-month baseline, resulting in a labor demand composite score of 3.10, which is in the bottom tier. This combination signals a contraction in labor demand, indicating that the city is not adding jobs at a significant rate. The lack of genuine demand expansion may pose challenges for businesses relying on a growing workforce.

Unemployment

The unemployment rate in Milwaukee-Waukesha is 3.20%, ranking it in the top tier, which means the market is tight with minimal slack. This tight market implies that businesses may face difficulties in hiring, as the pool of available workers is limited, and may need to offer competitive wages to attract talent. The low unemployment rate also suggests that workers may have more bargaining power.

Wage Growth

The year-over-year wage growth in Milwaukee-Waukesha is +1.33%, which is in the bottom tier, indicating stagnant wage growth. This slow wage growth may keep labor costs flat for employers, but it also means that workers may have weak bargaining power and limited purchasing power. As a result, businesses may not need to worry about rapidly rising labor costs, but they may also struggle to attract and retain top talent.

Cost of Living

Milwaukee-Waukesha has a cost of living score ranking it in the 21st percentile, with a PSF of $230/sqft and an average hourly earnings of $36.46/hr, resulting in a ratio of 6.31. This means that the city is relatively expensive compared to its peers. The low affordability score may make it challenging for businesses to attract talent without offering wage premiums to offset the high cost of living.

Labor Force Growth

The civilian labor force in Milwaukee-Waukesha is growing at a rate of -0.14% year-over-year, which is above average, but still indicates a contracting labor pool. This contraction may pose a structural headwind for hiring, as the supply of available workers is shrinking. Businesses may need to adapt their hiring strategies to accommodate the limited labor supply.

Building Permits

The number of residential building permits in Milwaukee-Waukesha is increasing by +7.85% year-over-year, which is above average. This expansion in housing supply may improve affordability and accommodate a growing workforce in the future. The rising permits suggest that developers are confident in the city's prospects, which may lead to a more favorable business environment.

Days on Market

The median days on market in Milwaukee-Waukesha is 33 days, with a year-over-year increase of +13.8%, ranking it in the top tier. This means that homes are sitting on the market for a relatively long time, indicating a slower and more buyer-friendly market. For workers relocating to this city, the slower market may make it more accessible to find housing, but it also suggests that the city's housing market may not be as competitive as others.

Office Economy

The share of professional and office workers in Milwaukee-Waukesha is relatively low, ranking it in the 16th percentile. This indicates that the city's talent pool is not as deep in professional and office sectors, making it less suited for businesses in tech, finance, or consulting. However, the city may be more suitable for industries with fewer specialized roles, such as industrial or logistics.

In conclusion, Milwaukee-Waukesha offers a unique combination of a tight labor market and relatively expensive cost of living, which may pose challenges for businesses looking to hire and expand. The single biggest risk or constraint for decision-makers is the low labor demand and contracting labor pool, which may limit the city's potential for growth and development.