The Economics of Outdoor Recreation

New data release shows outdoor recreation accounted for 4.7% of Montana’s economy last year, while the initial chilling effect brought on by COVID-19 may prove to be a boon

By Tristan Scott
Anglers in a drift boat on Bigfork Harbor on May 21, 2020. Hunter D’Antuono | Flathead Beacon

Outdoor recreation is not only intrinsic to the Montana lifestyle, it is also one of the most crucial parts of the state’s economy, a point that was again underscored in a new report by the U.S. Bureau of Economic Analysis (BEA), which listed the Treasure State as a top contributor to the nation’s gross domestic product in revenue generated by outdoor activities.

According to the report released last week, the outdoor recreation economy accounted for $459.8 billion of the country’s national gross domestic product (GDP) in 2019, or 2.1%. Combined with new data from 2018, the burgeoning industry’s two-year contribution to the country’s economic output is $788 billion, supporting 5.2 million jobs.

The new BEA data don’t include analysis of the outsized impact the COVID-19 pandemic has had on the outdoor recreation industry, which suffered as stores and manufacturing plants shut down and national and state parks closed or adjusted operations. In May, the U.S. Census Bureau ranked the industry as the second most affected by the coronavirus-inducted downturn, behind the food and accommodations sector, according to Lise Aangeenbrug of the Outdoor Industry Association.

But Aangeenbrug said a new survey of the national trade organization’s members shows the financial impacts are beginning to ease as the options for outdoor recreation outweigh more conventional entertainment and vacation avenues, which remain limited.

“The BEA release of economic data comes at a time when the health and wellness benefits of recreation cannot be overstated,” Aangeenbrug said. “A recent poll showed 69% of Americans have gained a renewed appreciation for the outdoors during the COVID-19 pandemic. People want to get outside for their physical and mental health.”

From bikes and boats to bows and arrows, the surging sales of outdoor recreation gear will likely figure prominently into the 2020 economic picture, particularly in terms of resilience, Aangeenbrug said.

“What’s more, they yearn for social connection, which they can find through safely distanced activities in neighborhood parks or national parks,” she added. “Now more than ever, we need the outdoors.”

For its part, Montana’s outdoor recreation economy contributed $2.5 billion and employed 31,598 people, while making up 4.7% of Montana’s total economy. That places Montana near the top ranking for its size, placing third behind Hawaii, which linked 5.8 percent of its GDP to the growing outdoor recreation economy, and Vermont, with 5.2%.

“In Montana we understand the far reaching benefits and impacts of a healthy and vibrant outdoor recreation economy on nearly every facet of our lives and livelihoods,” said Rachel Schmidt, director of the Montana Governor’s Office of Outdoor Recreation. “Having this economic data is vitally important to forming the best policy decisions to support and enhance the recreation economy at every level of government in the country.”

Montana is one of 11 states in which outdoor recreation accounted for 3.1% or more of a state’s economy.

Further, in real gross output, compensation and employment grew faster in the outdoor recreation economy than the national economy as a whole, the report states. Average compensation per wage-and-salary job in Montana’s outdoor recreation industries was $36,506 in 2019, compared with $56,278 for all salaried jobs in the state.

“Outdoor recreation activities fall into three general categories: conventional activities (including activities such as bicycling, boating, hiking, and hunting); other core activities (such as gardening and outdoor concerts); and supporting activities (such as construction, travel and tourism, local trips, and government expenditures),” the BEA explains at the top of the report.

Within those categories, the following stood out in 2019:

Boating/fishing was the largest conventional activity for the nation as a whole at $23.6 billion in current-dollar value added, and also held the top ranking in Montana, which contributed $164.5 million. This was the largest conventional activity in 30 states and the District of Columbia and the second largest activity in 11 states.

RVing was the second largest conventional activity nationally at $18.6 billion in current-dollar value added, and claimed the same ranking in Montana, where it contributed $132.3 million. This was the largest conventional activity in 10 states and the second largest in 22 states and the District of Columbia.

Snow activities was the largest conventional activity in Colorado ($1.7 billion), Utah ($666.3 million), Vermont ($286.9 million), and Wyoming ($147.5 million) in current-dollar value added. Montana ranked 21st overall, contributing $63.3 million.

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