The Butte-Silver Bow and southwestern Montana outlook: economic transformation continues.

• Author: Barkey, Patrick M.
• Position: Statistical data

The process of diversification away from its historic mining roots continued in the Butte-Silver Bow economy in 2012, yet the influence of minerals and natural resources to the local economy remains important. Strong growth in health care and administrative support services helped propel Butte-Silver Bow wages and salaries to 2.6 percent growth in the 12-month period ending in June 2012. We expect to see growth between 2.0 percent and 2.5 percent in inflation-adjusted nonfarm earnings in 2013-16 as the economy continues to evolve. This growth is slightly below the state average, but above the annual growth rates of most of the past two decades.

Recent growth across the six-county southwestern Montana region is varied (Figure 1). Expansion in health care services in early 2012 helped Anaconda see faster growth in wage and salary income, while government cutbacks and a stagnant construction economy held back growth in the outer counties of the region. The activities of Montana Tech in Butte and The University of Montana-Western in Dillon have been stabilizing forces in the local economy.

Particularly in employment, health care growth has outpaced other industries, accounting for more than four out of every five jobs added between the year ending in June 2012 and the preceding 12-month period. When measured in terms of total wages, however, that growth contribution slips to 50 percent, as the mild uptick in the total wages of high-paying mining jobs rises in relative importance.

While manufacturing, transportation, and health care have risen in prominence, the outlook for Butte-Silver Bow continues to hinge crucially on the mining sector, especially copper. Bonuses paid (or bonus payments not paid) to miners exert a significant influence on overall growth. In the slowing global economy, this raises some concern as commodity prices are expected to largely move sideways in the next year. Our forecast reflects the expectation that prices remain high enough to not threaten the profitability at Butte's mining operations.

The uptick in growth in the forecast is partly due to projected growth...