Report: Wisconsin economy won???t recover until 2010

Key state indicators show the Wisconsin economy has entered a recession that???s likely to last throughout 2009, according to the quarterly Wisconsin Economic Outlook released Friday by the Department of Revenue.

The announcement follows the recent confirmation of a national recession that began in December 2007, according to the National Bureau of Economic Research. The freezing of the credit market and drop in foreign demand are the major factors driving the economic crisis, which has worsened significantly since the state???s Revenue Department???s August outlook report.

State employment will continue to decline due to sizable job losses in the manufacturing and trade, transportation and utilities sectors. Total state employment is expected to decrease by 0.6 percent in 2008 and 2.2 percent in 2009, and won???t begin recovery until late 2010, according to the Revenue Department???s report.

Content Continues Below

???The national economic crisis has serious consequences for us all, as we face job losses, declining income growth and a severe state budget shortfall,??? said Revenue Secretary Roger Ervin. ???With Wisconsin???s economy worsening significantly, it is more important than ever that we work together to meet the challenges ahead.???

The steady growth of Wisconsin personal income shown over the last three years is expected to stall in 2008 and 2009. After posting 5.7 percent growth in 2007, Wisconsin personal income is expected to grow 3.1 percent in 2008 and 1.4 percent in 2009, with a mild recovery in 2010.

In Wisconsin, the negative impact of the housing crisis will be less than in other parts of the country because of the relative stability of the Wisconsin housing market. However, Wisconsin housing has not yet hit the bottom, with building permits continuing to fall and homes sales down nearly 17 percent in the third quarter of 2008. State median home prices continue to decline, though not as sharply as in the United States as a whole.