A New Year Needed

By Kellyn Brown

A new year, a fresh start? I hope so. The last one turned sour about midway through and ended on an especially bitter note when the Columbia Falls Aluminum Co. announced just a few days before Christmas that it was shutting its doors.

When, exactly, did 2008’s optimism fade? The year began with presidential primaries that the country seemed collectively excited about. The candidates crisscrossed the country – and even Montana, home to the last primary on the Democratic side, basked in the attention.

Meanwhile, the economy nationwide began to sputter – sparking an interesting contrast with the eternal optimism necessarily inherent to presidential campaign rhetoric. Homes, it turns out, had been overpriced and those who bought them couldn’t afford to pay their mortgages, many of which had unexpectedly jumped. Foreclosures increased, but not necessarily in Montana. After all, economists told us that we were partially sheltered from the national economy. And we believed them.

So when Plum Creek Timber Co. began laying off employees in September, it was widely attributed to the long-term decline of the wood products industry instead of any ripple effect from the national economy, which was quickly growing worse. Many pointed to Montana’s unemployment rate, still well below the national average.

The construction slowdown and stagnant real estate market, we were told, would be short lived – a blip. Home prices hadn’t increased at the rate of those in Nevada and Arizona, which were really in trouble. And Montana banks hadn’t gotten caught up in the sub-prime mortgage train wreck. Credit would still flow freely through the state, even as some experts scaled back their growth predictions.

But then the big banks began to fail, and the stock market began to tank, and politicians began talking about a government bailout. And Montana’s Main Streets heard the grim news: Its bottom line would, in fact, be affected by the national economic downturn. There were fewer classified ads and longer lines at the job service lobby. What was once a robust economy, one in which flipping burgers demanded $9 an hour, was beginning to look ordinary.

As the new year inched closer, it would only get worse. One by one, the Flathead Valley’s biggest employers announced they were scaling back their respective operations. Plum Creek laid off more workers. Semitool shed jobs, and then seized production for two weeks over the holidays to save on costs. Goose Bay Equipment Co., a major Flathead Valley contractor in business since the 1970s, may shutter. And to end 2008, CFAC said it’s closing. If it wasn’t before, it’s now crystal clear that Montana wasn’t at all immune from the broader downturn. Even in the Northern Rockies, the economic earth has grown a little flatter.

But while the state’s unemployment rate is still below the national average, Flathead County’s is now above it. Unlike other urban areas in Montana, the backbone of this economy is still industry, which has been paralyzed by this recession.

As a new year begins, however, a few reasons persist that might leave one feeling cautiously optimistic. Montana is expected to have a budget surplus. While not as big as first hoped, the state government is in far better shape than most, and lawmakers won’t dare raise taxes in this economic climate.

Most economists expect the recession to begin lifting in the second half of 2009, which could mean by the summer there will again be a demand for labor, especially if more commercial development begins breaking ground on Kalispell’s north side.

The U.S. Congress is expected to pass a multi-billion dollar stimulus plan, focused mainly on improving infrastructure. That may buoy the reeling construction industry if crumbs from that pie sweep up toward the Flathead. While it’s not yet time to take solace in it, the second half of 2009 looks brighter than the second half of 2008. The winter may be dark, but the spring, when it arrives, could bring renewed growth.