Jobs Issue

A Rapid Economic Recovery as Tight Job Market Returns

State and countywide data reveal strong economic growth, but employers are struggling to find workers

By Maggie Dresser
Backslope Brewing in Columbia Falls on Dec. 23, 2020. Hunter D’Antuono | Flathead Beacon

When a state shelter-in-place mandate was enacted a year ago in Montana, shutting down bars, restaurants and non-essential businesses, the economy took a nose dive and brought the unemployment up to 11.3% in Montana and 16.6% in Flathead County in April 2020.

But fast-forward a year later and Montana is experiencing a rapidly recovering economy with a statewide unemployment rate of 3.9% and 6.3% for Flathead County as of March 2021, and employers are once again seeing the same staffing shortage that existed before the pandemic.

“We definitely are seeing employers with a high need of hiring,” Job Service Kalispell Manager Laura Gardner said.

During the week of March 22, there were 1,099 job openings in Flathead County compared to 733 jobs in March 2019, with openings stretched across every industry ranging from hospitality to construction to healthcare.

“It’s across the board,” Gardner said. “We’re seeing every industry sector being hit. There are a lot in the service and retail industries and the medical field … I don’t think anyone is immune to needing workers.”

Gardner isn’t necessarily surprised that a workforce shortage has returned. In the last few years, employers have struggled to recruit qualified workers, while affordable housing for the workforce and employee retention remain issues.

Montana Department of Labor and Industry (DLI) Chief Economist Barbara Wagner, too, is concerned about the labor market despite Montana’s rapid economic recovery.

“For the last decade, we’ve had worker shortages, and as we approach this recession we have two issues that we’re really focused on — one is to make sure our job growth goes back and our businesses are doing well, but we also want to make sure those workers remain in the labor market so when our economy recovers, they’re still engaged and they’re there to help us continue to grow,” Wagner said.

Montana is adding jobs faster than during other recession recovery, Wagner said, regaining almost 6,000 jobs per month compared to 500 jobs per month following the 2008 recession.

“The regain back is insanely fast,” Wagner said. “I don’t think any economist starting last summer would have ever predicted such a rapid recovery we’ve had and we continue to do really well.”

However, the economic growth started to slow slightly in December 2020, which Wagner says is to be expected after such rapid growth. But she says people are now starting to exit the labor market, which economists are unable to explain.

“We are starting to hear reports about businesses unable to find workers,” Wagner said. “We know there are unemployed people and we have people dropping out of the labor market that are not going into open positions. At this point it’s noneconomic.”

In the beginning of the pandemic, Gardner says some populations who were vulnerable to COVID-19 left the workforce, and a lack of childcare has also likely contributed to the labor market, but officials aren’t sure if that’s still the case.

But despite the recession, Montana’s unemployment rate of 3.9% is low, and Wagner says if it drops much lower it will be especially difficult for businesses to find employees.

As of December 2020, Montana’s change in unemployment ranked eighth best nationwide, down only 1.6% and 8,170 jobs from February 2020. As of January 2021, Flathead County ranked 40th statewide, down .3% and 132 jobs from January 2020.

The leisure and hospitality industry has taken the biggest economic hit, but Wagner is seeing slow improvements and says it’s at 77% of what it was prior to the recession, trailing behind other industries that are nearly completed recovered.

The outdoor industry in the Flathead has helped keep part of the tourism sector alive, Wagner says, and the ability to social distance outside has prevented a more serious downturn.

“I’m curious to see how it comes out during the summer months,” Wagner said. “I think we should be seeing a widespread surge in activity.”

As vaccine availability becomes more widespread, Wagner says that will also play a role in the economic recovery, although it’s too early to tell and no data is available yet.

“Overall, we’re doing really well,” Wagner said. “We’re hearing from businesses that they want to hire again … I do think this is a great sign for our economic recovery.”

In the Flathead, officials at Job Service Kalispell are working to fill vacant jobs and brainstorming ways to retain the current workforce. The DLI has training programs that help employers invest in their current employees.

Job Service Kalispell will host the Workforce Flathead Opportunity Fair for the whole month of April, which will combine a virtual job fair with opportunities to meet employers in person.

The schedule includes manufacturing and trades from April 5-9; tourism, hospitality and retail from April 12-16; healthcare and bioscience from April 19-23; business, finance and other workforce opportunities from April 26-30.

For more information, contact Job Service Kalispell at (406) 758-6200 or kalispelljsc@mt.gov, or visit www.workforceflathead.com.

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