Missoula County: a new growth reality?

• Author: Polzin, Paul E.
• Position: Statistical data

This has been a long recession for the Missoula County economy, but the end may finally be in sight. The latest data for employment show definite growth during 2012 while corresponding figures for inflation-adjusted wages also turned upward, but with significant volatility. This follows three straight years of declines from 2007 to 2010 and only miniscule growth in 2011. Missoula's average growth over the past decade was much slower than during the previous three decades.

The wood products industry was a major, but certainly not the only, culprit during this recession. Stimson Lumber Co.'s Bonner sawmill and plywood plant closed in 2007 and 2008. This was followed by the shutdown of the Smurfit Stone pulp and paper plant in Frenchtown. All together, the wood and paper industries lost about 1,000 jobs in Missoula County between 2004 and 2011.

Missoula's construction industry plummeted, although not as much as in other areas in Montana which were more dependent on second-home and recreational building. The Great Recession was hard on retail trade, long a cornerstone of the Missoula economy. The longer-term changes will be discussed shortly, but the big shockers were the closing of Macy's downtown and the more recent shutdown of K-Mart on the 93 Strip. Although in both cases, the immediate causes of the closings were a mixture of recession effects and changes in corporate priorities.

There have also been long-term structural changes in Missoula's economic base. As recently as 2003, the wood and paper products industry accounted for a much larger share of basic earnings than The University of Montana. As shown in Figure 1, The University of Montana and other state agencies are now the largest basic industry and are roughly three times larger than wood and paper products. The University of Montana stands as one of the few basic industries (along with trucking and rail) to experience growth. The growth at UM was primarily due to outside-funded research rather that state-appropriated funds, and the impact of the recent enrollment decline is still uncertain.

Missoula remains the trade and service center for western Montana, but the relative importance of retail trade has declined while the contribution of other services (which includes health care) has...