It’s been a long time since these words have been uttered in the Flathead Valley, but the economic outlook for 2013 is “really optimistic,” according to presenters at the 11th Annual Flathead Economic Forecast breakfast.
The presentation, which took place on Jan. 30 at Flathead Valley Community College, gave the audience an update on the Canadian influence in the local real estate market, real estate predictions from appraisers’ perspectives and a look at how global and national trends affect the Flathead.
Brad Eldredge, FVCC’s executive director of institutional research assessment and planning, said he believes 2013 will be a year of economic growth for the Flathead.
“I’m actually really optimistic about this coming year,” Eldredge said. “I think a lot of the headwinds that we’re up against, I think we’re past them.”
With this positive outlook, Eldredge projected a 2.5 percent increase in jobs in the Flathead in 2013.
The Flathead Valley’s economy tends to correlate more with global and national markets now than with the rest of the state, Eldredge said, because there is more manufacturing and less agriculture here than in other places in the state.
Eldredge said the Bakken oil boom in North Dakota has benefitted Flathead residents because it has provided an outlet for unemployment and people are sending money back to their families, boosting the local economy.
The stock market is also doing well, Eldredge said, which gives people a sense of security because their 401(k)s are going up and their housing is worth more, which makes them spend more.
Other indicators in the Flathead are also positive, he said. Unemployment was 9.1 percent in December, down from 10.4 percent the year before, and the average wage per job was up to $38,050 in 2011. And that number should go up for 2012 given the preliminary numbers he’s seen, Eldredge said.
The manufacturing sector saw the largest jump in employment from 2011 to 2012, with a 7.1 percent increase. It was followed by a 4 percent increase in construction jobs, which Eldredge said is a good sign that the construction industry is moving past its rock bottom.
“Construction is no longer a net negative for the Flathead, which is a real positive for the Flathead,” Eldredge said.
The largest job decline in that time period was in government.
Health care continues to grow in the Flathead, Eldredge said, which also highlights a potential problem for the local unemployed workforce. The Flathead is not going to get 2,000 construction jobs anytime soon, he said, and so those people need to learn new skills to fit in with the new economy being created here.
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Kim Morisaki, with Montana West Economic Development, speaks on behalf of Donna Townley, with the University of Lightbridge, Canada, concerning the impact of Canadian spending on the local real estate market during the 11th Annual Flathead Economic Forecast at Flathead Valley Community College. Lido Vizzutti | Flathead Beacon |
That includes manufacturing, which saw major increases in employment as well as in wages; all manufacturing wages in the second quarter of 2012 increased by over $3.97 million over the same time in 2011.
“And that’s just one quarter of wages,” Eldredge said.
Economic projections are also difficult due to politics, Eldredge said, citing the fiscal cliff and the debt ceiling as example.
“I’m optimistic as long as Congress doesn’t screw it up,” he said.
In real estate, Canadians continue to purchase property at astounding rates in the Flathead, according to information compiled by Donna Townley, an economic instructor at the University of Lethbridge, Jim Kelley of Kelley Appraisal and Flathead County records.
Up to 1999, Canadians had purchased 313 properties in Flathead County. From 2000 to 2013, they bought 1,254 properties here. Buying power from Canadians depends on the exchange rate, property prices, household income and financial position, according to a report from Townley, which have all been favorable as of late.
Barbra Bennett of Bennett Appraisal Services and Ellie Clark of Clark Real Estate Appraisal and Consultants said the Flathead’s real estate market looks to be out of the recession phase and headed into recovery.
Most real estate markets have at least a six-month supply of properties waiting to be sold or leased, but Bennett and Clark said buyer confidence seems to be improving.