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Montana near the top
for growth in income
Once again, Montana ranks among the top states
in the nation for personal income growth, according to figures
released Tuesday by the U.S. Department of Commerce's Bureau of
Economic Analysis.
“There's a constant drumbeat about the failure of the economy,” said Thomas Power, chairman of the University of Montana's economics department and a specialist in regional economics. “That's tied to a couple of things. One is that we really don't have a state economy. The eastern two-thirds of the state is a largely agricultural economy that hasn't been growing.” But other industries are making strong gains in the Rocky Mountain region - Colorado, Idaho, Montana, Utah and Wyoming - and helping to push up overall earnings, said Kathy Albetski, a supervisory regional economist with the Bureau of Economic Analysis. In particular, a booming construction industry has contributed to the Rocky Mountain region's increases in income. In Montana, the health care and social assistance sector is shoring up those gains, while elsewhere in the region growth in professional and technical services is also contributing to overall income growth rates, Albetski said. “Those are the leaders in terms of contributing to percentage change,” she said. For the past 10 years, population increases throughout the region have been feeding the economy, and especially the construction industry, said Larry Swanson, director of UM's O'Connor Center for the Rocky Mountain West. The state's construction industry saw an increase of $180 million in labor earnings from 2004 to 2005, Swanson said. For the same period, the health care industry made gains of $174 million, and professional and technical services had a total increase of $102 million. “The income base of the state as a whole is growing fairly well,” Swanson said. The bureau's statistics show that Montana's total personal income rose from nearly $26.5 billion in the fourth quarter of 2004 to just over $28 billion in the fourth quarter of 2005. But growth rates aside, a close look at Montana's per capita personal income reveals a less impressive picture. In 2005, Montana ranked 39th in the nation with an average per capita personal income of $29,387. Those are the kinds of dramatic numbers that stick in people's minds when they contemplate the economy, Power said. People think the statistic instills the conclusion that the Montana economy is somehow failing, Power said, which “weighs heavily on people's minds.” Montana is part of a region that's been struggling for nearly a century, he added. It's not easy to shake off that mind-set and appreciate the fact that for more than a decade, the state's economy as a whole has seen ongoing growth. “I think it is important to emphasize that Montana's economy has been growing at an above-average rate compared to the rest of the nation for most of the last decade, so people's perception of the Montana economy as failing is distorted,” Power said. Nationwide, the per capita income growth rate saw a slight decrease, from 5 percent in 2004 to 4.6 percent in 2005. For the United States as a whole, per capita income settled at $34,586 for 2005. From 2001 to 2005, Wyoming's per capita personal income grew faster than any other state's, the bureau reported. Wyoming also has the nation's fastest growing personal income rate, at 7.3 percent - an increase the bureau attributed to the state's prosperous mining industry. North Dakota has the country's second fastest income growth rate, at 6.4 percent, and Nevada and Virginia follow closely behind Montana with growth rates of 6.2 percent. Hurricane-ravaged Louisiana was the only state in the nation to have a negative income growth rate. It saw a decrease of 9.1 percent. Reporter Tyler Christensen can be reached at 523-5215 or at tchristensen@missoulian.com
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