Montana’s economy looks poised to ride some strong waves in the coming year, as local and regional employers forecast future growth.
A pickup in housing starts, combined with lots of rebuilding work on the storm-ravaged East Coast, mean good news for the state’s forest products industry. According to the Federal Reserve Bank of Minneapolis’ Beige Book November 2012 edition, the value of Billings-area commercial construction permits this fall was four times greater than at the same point in 2011. Residential construction permit values were up 300 percent.
The Fed also reported that 31 percent of building professionals expected to hire more workers in 2013, compared to only 18 percent who were that optimistic last year.
Montana posted a 6 percent unemployment rate in October, according to the U.S. Bureau of Labor Statistics. That was 14th best in the nation, while next-door North Dakota led the country at 3.1 percent and Nevada brought up the rear at 11.5 percent. Compared to October 2011, 44 states marked employment gains.
Montana’s neighbors were all above the median unemployment rate, with South Dakota posting 4.5 percent at No. 3, Wyoming at 5.2 percent (No. 6) and Idaho at 7 percent (No. 24)
Nationally, housing permits have reached their highest level since August 2008, according to U.S. Department of Commerce figures. Combined with low borrowing costs, that foretells more business for home builders and related industries.
But there are advantages to not cutting the forests as well. A new study released by Bozeman-based Headwaters Economics found that Montana’s fastest-growing employment sector was in service jobs, including health care, professional and technical trades and real estate sales. And the single driving factor was proximity to protected public lands, Headwaters director Ray Rasker said.
“What we found was employers are using the lifestyle of the West as a way to attract talent,” Rasker said. “The average salary is about $35,000 a year in the West, per capita. But there’s a 10 percent premium for areas located next to 100,000 acres of public lands. It’s one of the unique circumstances that set the West aside from the rest of the country.”
Rasker said Montana job losses in manufacturing and farming were greatly offset by growth in the professional services over the past decade.
“What elected officials are talking about almost exclusively is jobs, so we thought it was a good time to listen to some CEOs and see where jobs are coming from,” he said. “It’s in areas probably different from what most people perceive. These folks don’t necessarily open a store front on Main Street. They’re not always visible to the community. We need to re-educate ourselves on what’s driving the economy.”
For example, Ticketprinting.com CEO Lance Trebesch said that what made his company function was access to high-speed broadband service. The company is based in Bozeman but has offices in Canada, Australia and the United Kingdom making special-order tickets for raffles and contests. It also employs home workers in places like Livingston, Harlowtown and Two Dot.
“We’re the largest private employer in Wheatland County,” Trebesch said. “Whatever we can do to attract and retain top talent in your state is the most important competitive advantage you can build. Bozeman is surrounded by Forest Service land, designated wilderness and BLM land. Our people like to play hard and work hard.”
Citing U.S. Department of Commerce figures, Rasker said Montana has added 14,402 jobs in the health care and social assistance category between 2000 and 2011, 12,715 jobs in real estate/rental leasing, and 8,272 jobs in professional, technical and scientific services. Farm employment has lost 3,484 jobs, and wood product manufacturing has lost another 3,857 jobs in the same period.
Western states like Montana have also seen growth in the amount of nonlabor income — investment earnings, pensions, rent — that underpin community economies without affecting the employment numbers. Many of the people relying on that income are retirees who move to a place for its aesthetic appeal, Rasker said.
“Extractive industries like mining and logging and agriculture (were) our economic history,” Rasker said. “Now we’re adding new sectors on top of that. There’s a perception of public land trapped in that extractive economy. You were logging trees or operating a ski lift or mining or running a rafting company, where it was all resource extraction or tourism. Now fast-forward, and it’s very different. Company CEOs say ‘I want to live here next to these mountains because I want to go there after work. After work I’m mountain-biking or fly-fishing.’ ”
Montana has also seen a boom in energy-sector employment, especially on its eastern edge and along the Rocky Mountain Front. Department of Commerce figures show a boost of 6,037 jobs over the past decade in mining, oil and gas work.
But the Federal Reserve Beige Book noted that while oil and gas production has hit record levels in the Bakken region, energy exploration has flattened in North Dakota and declined in Montana.
Missoulian reporter Rob Chaney may be reached at 406-523-5382 or firstname.lastname@example.org.