HELENA – The state’s economic recovery likely will happen without a boost by the construction industry, an important sector in past recoveries, University of Montana economist said.
Patrick Barkey, the director of UM’s Bureau of Business and Economic Research, is presenting a mid-year economic update across the state titled “Montana’s Construction-less Recovery.”
The bureau forecasts continued growth in household and corporate earnings, is optimistic about energy and agriculture, but expects a stagnant construction and wood product industry.
“There are some recessions that target a specific industry,” Barkey said Monday in Helena. “This is a case of a recovery that hasn’t invited” construction.
Fewer people moved from state to state last year, reducing demand for new housing. He said people may be staying put because their house is worth less than they owe on the mortgage.
Still, the state’s economy is expected to improve.
Montana is expected to see a 2.1 percent growth this year, 2.4 percent in 2012 and additional increases of 0.1 percent over the next two years, Barkey said.
“Relative to where we’ve been, which is the negative, it’s good,” Barkey said. In years prior to the recession, the state had seen average economic growth of 3.3 percent.
Dustin Stewart, executive director of the Montana Building Industry Association, said housing usually leads the economy out of a recession.
“It’s good to see that they believe we’re in an economic recovery, and once the rest of the economy moves in the right direction, housing will follow,” Stewart said.