January 2010

1 percent unemployment drop in November a nice surprise

By Alan Van Ormer

For many businesses in Lake County and around the state, 2009 has been a tough year. However, the end of the year brought some good news to the local economy after the November unemployment rate dropped more than 1 percent.

“It kind of surprised me a little bit,” said Dustin Williams, plant manager at Gehl Company, whose manufacturing company has had to cut its employee base in half because of the recession.

Ed Fiegen, Community Banking President at Wells Fargo in Madison, said it is good news about the 1 percent unemployment decrease. “You hope that is a sign of recovery,” he said. “Sometimes it helps if you just change the attitude or outlook about things. People look for positive signs that the economy is recovering. This could be a sign.”

Jim Baltzer, field office manager for the South Dakota Department of Labor, said the 1 percent drop in unemployment is obviously a positive. “I don’t want to take anything more away from it in that it is positive and that that things are moving in the right direction,” he said. “However, I would still caution that I think things in Madison and statewide are still pretty tight as far as the job outlook.”

In November, the unemployment rate was 5.9 percent for Lake County. The month before the unemployment rate was at 7 percent. Throughout 2009, the unemployment rate was never lower than 5.3 percent and topped out at 7.7 percent in July.

The numbers of openings has decreased in the job employment office. In a good year, the daily job listing sheet exceeds three pages. Over the past 12-18 months, the job listings have dwindled in size. In December, there were only 77 job openings listed in the Madison office available in Lake, Moody and Miner counties.

In 2009, the service industry, health care and government jobs remained steady, according to Baltzer.

Fiegen said agriculture also provided a boost. “Overall, part of our economy is cushioned by the ag sector doing fairly well,” he said. “It definitely helped.”

Manufacturing suffered the most during the year.

Employees at Gehl Company know firsthand what the recession has done.

Before the recession started 12-18 months ago, the manufacturing company had more than 400 employees. Now, Gehl is down to 200 people.

“Our business is off about 80 percent from last year,” Williams said. “We tried to keep as many persons employed as possible because we knew this was a blip. We tried to hold on to as many employees as we could.”

In the first week of January, Williams is seeing some positive signs. “We have taken a months’ worth of orders in the first week,” he said.

On Madison’s Main Street, Fiegen said he has heard that besides businesses closing, others have reduced hours and have less overtime for employees. “A lot of cases they are really trying to hold on to key employees,” he said.

Overall, Williams thinks the employment news is positive for the community, but also admits he does not know where it will go. “Hopefully when the economy recovers, and everybody is healthy, it will be a healthy competition for employees,” he said. “And we feel like we are in position to compete as well as anybody for that talent.”

Fiegen said people are sure trying to be optimistic. “I think one thing I was encouraged by was that many people had money in savings and were prepared for the downturn,” he said. “They were able to make adjustments to their lifestyles and spending.”