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State Economic Forecast: Growth Shifts West, Ag Producers Worry About Drought

University of Montana economists present mid-year update in Kalispell

After rapid economic expansion in eastern Montana — fueled by the Bakken oil boom next door in North Dakota — growth has stalled in the region, and western Montana is again taking over as the dominate economic driver, according to the University of Montana Bureau of Business and Economic Research.

“Growth has shifted west,” said Paul Polzin, director emeritus of the bureau.

On July 28, Polzin and BBER Director Patrick Barkey spoke at Kalispell’s Hilton Garden Inn for a mid-year economic update sponsored by the Montana Chamber Foundation. Darryl James, executive director of the Montana Infrastructure Coalition, updated attendees on the state of Montana’s roads and bridges.

Wages continue to grow across the state, specifically in Gallatin and Flathead counties. Between 2007 and 2016, wages grew by an annual average of 5.3 percent in Gallatin and 3.2 percent in Flathead. In the last three years, between 2014 and 2016, wages increased by an average of 9.2 percent annually in Gallatin and 6.7 percent in Flathead.

“Kalispell and Flathead County has developed into a regional center,” Polzin said, adding that the growth has been spurred by new retail developments and professional jobs.

Overall, Barkey said, Montana’s economy is doing well, although sluggish agricultural earnings are currently holding it back. In 2015 and 2016, farm earnings dropped dramatically by 71.2 percent. Barkey said drought conditions and wildfires in central and eastern Montana are also a concern for agricultural producers.

Montana’s Economy: By the Numbers

Wage Growth Across the Region 2015-2016

Washington: 5.8 percent

Oregon: 5.1 percent

Idaho: 5.4 percent

Montana: 2.4 percent

Wyoming: -6.1 percent

North Dakota: -7.3 percent

Wage Growth in Montana by Industry in 2016

Construction: 2.4 percent

Information and Media: 1.9 percent

Administrative Services: -0.2 percent

Retail Trade: 2.2 percent

Annual Average of Real Wage Growth by County in Montana 2014-2016 (Adjusted for Inflation)

Gallatin County: 9.22 percent

Flathead County: 6.73 percent

Ravalli County: 5.73 percent

Yellowstone County: 5.01 percent

Missoula County: 3.25 percent

Silver Bow County: 2.87 percent

Lewis and Clark County: 2.87 percent

Cascade County: 2.71 percent

Projected Growth of Real Nonfarm Earnings by County 2017-2020

Gallatin County: 5.8 percent

Flathead County: 3.3 percent

Missoula County: 3.2 percent

Yellowstone County: 2.7 percent

Cascade County: 2.1

Lewis and Clark County: 1.8 percent

Silver Bow County: 0.4 percent

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