Economists: Missoula’s economic recovery trending ahead of national figures
The economic recovery in Missoula continues to outpace the national average, with most of the job losses stemming from the pandemic’s arrival now recovered and the labor force larger than it was a year ago.
But economists on Tuesday cautioned that such figures should be taken in stride, as a full book of the economic recovery has yet to be written and outside influences can wield a heavy hand.
“Missoula, at least according to these data, has bounced almost entirely back, which seems surprising,” said Bryce Ward with ABMJ Consulting. “Among all metro areas, Missoula ranks in the top 15 in terms of where it is relative to where it was a year ago in employment.”
While such figures carry optimism for Montana’s second largest city, they also include what Ward described as oddities. Missoula’s unemployment rate remains at 5.4% percent compared to 2.8% at the same time last year.
The only way that’s possible is if the city grew its labor force, which data suggests it did. According to estimates, Missoula added nearly 2,500 people to its workforce in June.
“My guess is that Missoula is suffering a bit from some sort of data quirk, but maybe we have fully bounced back,” Ward said. “It’s hard to say with certainty. It seems fair to conclude that we’ve probably done better than most parts of U.S. We’ll have to wait and see, but right now the picture is reasonably good.”
Ward presented the figures during the Missoula Economic Partnership’s annual meeting, held virtually for the first time on Tuesday as the Big Sky Business Insight Summit kicked off.
The pandemic loomed large in each presentation, both in its economic impacts and the uncertain course to recovery. That path to recovery will be influenced by a number of outside forces, including a change in consumer preferences, remote work, business output and public health.
While the economy is showing signs of recovery, Ward said, the pace of recovery is slowing.
“We’ve seen a much slower progression,” Ward said. “If we grow at the rate we grew last month, it’ll take us until the end of 2022 to get back to the levels we would have been if we’d not undergone the COVID recession. That’s going to create some drag for Missoula.”
Ward said every recession dating back to 1970 has been a recession led by goods. This time, however, the recession is led by sharp declines in the service industry.
The service industry still plays a key roll in unemployment in Missoula despite local growth in the technology and manufacturing sectors.
“There’s huge concentrated job losses among people who are low-wage service sector employees,” Ward said. “That’s going to have consequences for what policies are appropriate and what our trajectory out of recovery might look like.”
Grant Kier, president and CEO of the Missoula Economic Partnership, said the organization is watching the trends. While challenges remain, he said the city’s economic leaders remain optimistic and have seen a number of positive indications.
Among them, Kier said the city has seen solid job growth in five key industries, including technical services, bioscience and manufacturing. Alaska Airlines is adding three new daily direct flights from Missoula to San Jose, San Diego and San Francisco next spring, signaling its own confidence in the local economy and investments in the airport.
Kier said collaboration across industries also remains strong, and investor interest in Missoula is high.
“We’re seeing a ton of interest in the future of developing in Missoula – the kind of development we need here if we’re going to continue to grow and support our economy,” he said. “We need developers and investors to see Missoula as a bright spot on the map to make those investments so we can continue to thrive, and we’re seeing that now. That is optimistic for us.”
He said MEP will also address the city’s shortcomings, including workforce housing and child care. The shortage of both may serve as an economic drag until they’re resolved.
“We’re going to need commercial spaces for our growing companies in our urban areas, and we’re going to need workforce housing,” he said. “Once we get through this healthcare crisis, workforce housing and childcare are things that are going to limit our economic growth, quality of life and our standard of living here.”