Flathead Economy: And it Gets Worse

By Beacon Staff

Last summer, as Montanans watched the housing industry and economy crumble in other states, there were optimistic predictions that this area would be immune from the downturn. By now, those forecasts seem laughable.

Flathead County – already home to one of the highest unemployment rates in the state – was slapped with another round of mass layoffs last week, when two of the area’s largest employers announced cuts.

Semitool Inc. announced on Jan. 8 that it would lay off approximately 200 employees from its Kalispell and Libby plants because of lagging customer orders. On the same day, Plum Creek Timber Company announced it was eliminating a total of 145 jobs and leaving an additional 221 employees temporarily out of work in Kalispell, Columbia Falls, Fortine and Pablo.

“In comparison to the rest of the state, growth in Flathead County has been so strong in recent years, there’s almost a longer way to fall,” Barbara Wagner, senior economist with the Montana Department of Labor and Industry, said.

It seems like every industry the Flathead relies on has been affected at the same time. The area’s economic strengths – manufacturing, wood products, tourism, home construction – all are vulnerable to the recent global downturn.

“All the reasons the Flathead area is getting disproportionately hit are normally good things for the economy,” Wagner said. “These job sectors are great and lead to faster growth in normal times, but they’re also the industries that have been hit the hardest in the recession.”

January’s cuts come on the heels of a staggering end to 2008. Plum Creek, in response to a slumping wood products industry, had already shed about 125 jobs last autumn, while Semitool had laid off 100 and temporarily sent 700 home for three weeks over the holidays. Columbia Falls Aluminum Co. had cut 125 and, come February, will close its doors, leaving another 200 jobless.

And those are only the larger employers. Bill Nelson of the Flathead Job Service says he’s seen people from nearly every job sector in need of the group’s services.

“The trickle down effect is in full swing,” he said. “I think we’re feeling it everywhere.”

In December, 6,750 people came through Nelson’s office at the job service. There were even more looking for work in November when the service had 7,510 visitors. Job seekers are likely disappointed with their options.

“Right now, we have just under 40 jobs in our office and, obviously, a very high number of people looking for work,” Nelson said. “Generally, this time of year we have around 300 job orders.”

Flathead County’s unemployment rate jumped to 7.3 percent in November – closer to the nationwide 6.7 percent for that month than Montana’s 4.9 percent.

A map of November’s state unemployment rates is telling of this region’s troubles. Thirteen counties had an unemployment rate above 6 percent – six were in northwest Montana and another five were on the western half of the state. And of Montana’s seven most populated counties, Flathead has the most unemployed, Nelson said.

December’s state unemployment rates aren’t available yet, but given continued job losses, they’re expected to continue their precipitous climb here.

Following the latest cuts, Wagner said she expects more layoffs in retail and consumption based industries in the Flathead Valley. “That’s the natural progression of what would come next,” she said.

After the national unemployment rate jumped to 7.2 percent last month, many economists predicted that the country’s toughest six months would be the just-completed fourth quarter and the first quarter of this year.

If there’s one silver lining in the turmoil, Wagner said it’s that the Flathead’s weaknesses now will become strengths again when the market turns – the question, though, is how long area residents will have to wait.

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