An aging population and migration rank among the biggest hurdles facing Montana’s workforce and economy, according to Patrick Barkey, director of the Bureau of Business and Economic Research at the University of Montana.
“An emerging technology industry is tempering declines in other economic sectors, such as agriculture and mining,” he said. “But with an aging and retiring workforce, the state faces challenges in recruiting and training qualified young workers.”
Barkey gave his assessment Thursday morning in Missoula during a presentation called “The Economic Outlook for the U.S. and Montana.”
His talk was part of the 14th annual Economic Update Series organized by the Montana Chamber Foundation. The series takes place in multiple Montana cities each year to “provide brief mid-year updates and economic projections for local, state and national economies.”
This year’s theme was “Silver Tsunami: Are Montana’s Businesses Ready?” and focused on an aging workforce in Montana, rural and urban migration, and the impact of “baby-boomer” generation retirement on the workforce.
Barkey started off discussing global trends and influences.
“Global economic growth has been good,” Barkey said. “But challenges emerge.”
One of the challenges he addressed is a boom in Chinese steel exports, resulting from China’s capacity to produce steel now exceeding its use of steel. “They’ve used that extra steel to flood the world market,” he said. “Bringing prices down and hurting U.S. manufacturers.
Barkey cautioned against the use of tariffs to deal with such issues, because China has responded with its own tariffs which has hurt Montana farmers.
On a national scale, the news is mostly good.
“The U.S. has experienced economic expansion for the past 10 years and counting,” Barkey said. He attributes the growth to tax cuts, bigger deficits and low inflation rates.
While trade and housing are lagging, he said consumer and business spending are carrying the load. “The service economy is in charge; manufacturing growth is slowing.”
“So the question is, ‘Is Montana invited to the national economic party?’ ” Barkey asked. “The answer is largely, ‘yes.’ ”
He said the Montana economy has been steadily growing since 2016, but the future outlook is mixed.
Prices for major, traditional Montana commodities — such as framing lumber, barley, beef, wheat, copper, palladium, zinc and oil — are currently all below five-year highs, but haven’t reached five-year lows. Current beef prices, for example, are at $2.03 per pound. The five-year high is $2.72 and the five-year low is $1.59. Palladium is currently at $1,443.85 per troy ounce. The five-year high is $1,530.71 and the low is $502.52.
“The labor market continues to tighten,” Barkey reports. “State revenue growth has been good. There’s dark clouds looming for Powder River Basin coal. Recovery for Montana’s agricultural and energy producers has not been smooth. But high tech is the under-reported good news story, with good prospects for growth.”
Age demographics and migration trends are among the biggest challenges.
With a median age of 39.8, Montana is the “oldest Western state,” Barkey said. “Migration is the big wild card; a lot of young people move away.”
The median age in Missoula County is 35.4. In nearby Sanders County, it’s 52.7. In most of Montana, the median age is more than 40.
“The age bracket isn’t accommodating increases in labor,” Barkey said. “Labor-force challenges are likely to persist or worsen in Montana in coming years. Some solutions to this are better than others. It’s time to think outside the box and come up with creative solutions to bring people to the workforce.”
After Barkey’s presentation, Dylan Rogness talked about one such creative solution that he’s involved with.
A health-care transformation specialist and liaison for the Missoula College Apprenticeship Program, Rogness discussed successful efforts to recruit and train employees for professions such as health care and IT networking, administration and security.
“When people hear the word ‘apprenticeship,’ they usually think of trade jobs like welding,” Rogness said. “But other industries are having the same challenges in finding qualified workers as the trade industry is.”
Missoula college has worked with local businesses to form apprenticeship programs in which students can work and get paid, while also taking classes, with the goal of achieving long-term employment.
“Apprenticeships, or ‘earn-while-you-learn,’ programs aren’t new,” Rogness said. “But we’re now putting it to use in non-trade fields and professions. Montana is now the leading state in the country for apprenticeships in the health care profession. It’s a great program that entails private industry, state government and education coming to the table to the benefit of all.”
At the conclusion of the meeting, Bridger Mahlum, government relations director for the Montana Chamber of Commerce, thanked Montana lawmakers who have helped Montana address economic challenges. As tokens of appreciation, he presented pins to State Reps. David Bedey, of House District 86 in Hamilton, and Mike Hopkins, of House District 92, in Missoula, for their efforts to improve Montana’s economy.
Sponsors of the Economic Update Series include: The Atlantic Richfield Company; Charter Communications; Boeing; First Interstate Bank; Montana State Fund; Northern Broadcast Company; NorthWestern Energy; Stockman Bank; First Security Bank and the Washington Companies.