Market Update: We break down the business implications, market impact, and expert insights related to Market Update: BMO Wisconsin economy report cites labor shortages, housing prices – Full Analysis.
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- Wisconsin businesses were optimistic about the 2026 economy, according to a BMO report.
- The report was published before the Iran War, which raises questions about future impacts.
- A statewide labor shortage and rising housing costs are key concerns for businesses.
- The state’s historically advantageous housing affordability is reportedly eroding.
Wisconsin business operators have a favorable view of the economy, according to a BMO business outlook report.
But report was published before the war in Iran. And there are concerns about labor shortages and housing prices.
Dave Anderson, BMO head of commercial banking for Wisconsin and Minnesota, said the firm advises clients to “tune out of short-term noise.”
“We produced this before the Iranian conflict,” Anderson said. “I don’t know that the underlining tenets change, frankly.”
But there are questions about how the war could affect businesses if it continues.
“Many business owners are optimistic about the near future. I think there are a lot of questions that remain about, call it, the price of oil, or will there be supply chain disruptions that cause commerce to slow down,” Anderson said.
“Wisconsin businesses have had to navigate a lot of cycles, particularly in the last five or six years but even going back 20 [years],” he said.
One challenge has been the state’s labor shortage. The unemployment rate has hovered above 3% for more than a year.
And according to the Bureau of Labor Statistics, the labor force participation rate was 64.5% in January, which is above the national average of 62.5%.
So people are working, but businesses are having trouble finding more people to fill vacant positions.
“As a result, we also have slow growth,” Anderson said. “Because with the constraint of lower supply of labor, you tend to produce less.”
Housing is a critical component
Housing affordability is another concern businesses have when it comes to attracting and retaining employees.
Prices have gone up in the Milwaukee area, and up as high as 9% compared to the year before.
“Housing affordability, an historical advantage for the state, is eroding,” the BMO report reads.
The report also states the volume of home sales in the state dropped 2.1% in the final quarter of 2025, and prices increased 4.3% during the same period.
“That’s a real problem because it’s one of the decision points that labor makes in deciding to move to an area,” Anderson said. “And that is an area that I think Wisconsin does need to focus on.”
Despite those major headwinds, Anderson said local businesses are optimistic about 2026.
“The companies in Wisconsin in particular have done a really, really nice job in navigating through cycles and we haven’t had any absence of cycles,” Anderson said.
“As we look at their pipelines going into ‘26, the amount of bidding on new orders or new construction projects, that has continued to be very, very strong,” he said.