Missoula economy stands on many legs

Diversity helping city weather job losses, closed business
2010-12-19T00:05:00Z 2011-01-24T13:13:46Z Missoula economy stands on many legsBy BETSY COHEN Missoulian The Billings Gazette
December 19, 2010 12:05 am  • 

MISSOULA – This is a story about what is in store for the Missoula economy in 2011. But before local experts talk about the city’s future, they first reflect on the many significant events that defined 2010.

Macy’s. Smurfit-Stone Container Corp.’s Frenchtown paper plant. Sportsman’s Surplus. Finnegan’s.

So goes an abbreviated list of the many Missoula businesses that were forced to close their doors in 2010.

Despite the grim reality, despite the job losses, the local economy stood up fairly well to the economic recession.

Helping to stabilize the situation is the fact that Missoula has a diverse economy that stands on many legs, said Larry Swanson, a regional economist and director of the Missoula-based O’Connor Center for the Rocky Mountain West.

Education, health care, retail, government and professional services are all robust sectors that helped to keep the economy humming.

Extended unemployment benefits also helped to relieve some of the suffering, and federal aid helped to send many of the unemployed back to school to learn new employment skills.

“Missoula has been holding in there OK – almost better than any other area in the state, according to recent labor statistics,” Swanson said.

Yet there’s no getting around the fact that for most of the year, Missoula’s unemployment rate was unusually high – hovering around 7 percent.

That number was keenly felt at the Missoula Job Service, which hustled to advise more than 1,500 people a week who came seeking help. Most came in need of work, and some came because they were concerned about losing the job they held and wanted to learn more about updating their skills so they would have some sense of security and be even more relevant for their employer, said Wolf Ametsbichler, director of the Missoula Job Service.

It was a difficult year for Missoula’s workers, and it’s one Ametsbichler is happy to see in the rearview mirror.

“The large-scale layoff activity stopped pretty much after Smurfit-Stone shut down, and that was a relief,” Ametsbichler said. “We did see some isolated situations and dealt a little bit with smaller suppliers after the mill closed.”

As 2011 arrives, Missoula will likely experience the same slow recovery that the rest of state will likely experience, said Patrick Barkey, director of the Missoula-based Bureau of Business and Economic Research at the University of Montana.

Ametsbichler agrees with Barkey’s forecast: He sees the evidence at his place of employment.

“The year 2010 was one where nobody really hired, and except for the mill, nobody really laid off people,” Ametsbichler said. “The labor market was kind of stuck and there’s no reason to believe that will change dramatically.”

In Missoula, unemployment cycles are fairly predictable.

“Typically, December, January, February, it’s slow and no one is hiring, and then employment starts to tick up toward March and April for seasonal hiring,” Ametsbichler said. “A lot of that is construction-related, and tourism jobs start opening in April-May.”

During the spring and summer, Missoula’s unemployment rates are at the lowest point, and that will likely be the case in 2011.

Although new construction isn’t expected to spring back from its standstill, there is some action on the remodeling side of things, Barkey said.

Job growth will likely come from within the economic sectors that have continued to grow despite the recession, including health care and work related to Montana’s aging population, such as nursing homes and retirement communities, said Barbara Wagner, senior economist for the Research and Analysis Bureau at the Montana Department of Labor and Industry.

In coming years, in fact, all of Montana will experience growth in these areas.

“Montana has one of the oldest work forces in the entire United States and in 2014, the working-age population of 18 to 64 is going to start to decrease,” Wagner said. “The number of traditional working-age people will go down, which means less workers, and this larger, older population will change the types of services that will be demanded in our economy.”

“I’m not sure if businesses in Montana have fully prepared for this,” she said. “We will be losing lots of skills as people retire, and the big question is if the younger generations are being trained to fill those jobs.”

All in all, Barkey expects that most economic sectors in the Missoula area will improve, if just slightly.

“There are some exceptions,” he said. “The University of Montana, because of its enrollment growth, is strong and looks promising, and nonresident spending – tourism – should improve as the economy improves.

“The wood products industry shouldn’t get any worse, and construction will not feel like a normal year.

“The adjustment will be slow,” Barkey said. “We are not seeing a bounce back, but rather, a gradual recovery.”

Reporter Betsy Cohen can be reached at (406) 523-5253 or at bcohen@missoulian.com.

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