Montana's Cities and Regions: Pre-COVID Growth Patterns Reemerge.

• Author: Barkey, Patrick M.
• Position: MONTANA ECONOMIC REPORT

There was no escape from the ravages of the COVTD-19 recession across the landscape of Montana's regions in 2020. High-flying areas of the state and more slowly growing areas alike suffered astounding job losses during the spring of that year. Yet the surprise of that sudden and severe downturn has been closely followed by a vigorous economic recovery that contained its own surprises. Among these were superheated housing markets, significant price inflation and a surge in consumer spending. And through it all, the divergence in patterns of growth across Montana regions has resumed.

From a national perspective, there have been winners and losers in this economic recovery, and those outcomes potentially matter for individual Montana communities. Broadly speaking, this has been a recovery that has seen shifts in consumer spending patterns, continued disruptions in global commerce, decreased appeal of living in large cities and accelerated adoption of technology. And like any other time in our economic history, it has seen some industries outperform others.

Some disruptions were positive for regions of Montana. While international travel got off its deadbed in 2021, the real or perceived difficulties of flying overseas redirected visitors to domestic venues. Huge visitor volumes at Montanas two large national parks poured spending into the adjacent counties of Flathead and Gallatin. And the increased national appetite for housing in less densely populated areas has brought plenty of out-of-state buyers into local housing markets.

Tracking economic growth in terms of total wages paid to payroll workers, inflation-corrected, shows the differences in growth in the current economic recovery between the state's most populous counties, as well as the balance of the state. Since the latest data extend only to the second quarter of 2021, the growth shown in Figure 1 refers to the changes of fiscal year 2021 (July 2020-June 2021) compared to the previous fiscal year.

Gallatin County in southwest Montana adjacent to Yellowstone National Park continued to pace statewide growth, adding almost $300 million in wages in 2021. But $335 million in wage gains, more than a quarter of total state growth, occurred outside the largest seven counties in the state. Missoula and Flathead counties were in the next tier of growth as in past years, but 2021 saw considerable improvement in total wage growth in Yellowstone County, the states largest economy. Also notable...