By BETSY COHEN of the Missoulian | Posted: Tuesday, October 6, 2009 5:30 am
Montana's relatively low unemployment rate continues to buck the national average, but like the recovering national economy, the state is springing back from the slowdown without jobs.
"We are still waiting for jobs in this jobless recovery," said Larry Swanson, a regional economist and director of the Center for the Rocky Mountain West, a regional think tank at the University of Montana.
"But we are improving, things are getting better," Swanson told a conference room full of Missoula community leaders and business owners at a fall economic forum on Monday.
A return to economic normalcy is on its way, and one of the telltale signs is that unemployment trends are falling back into traditional patterns, where the jobless rate peaks in January and February - and falls in August and September.
While the recession has driven up numbers by 3 and 4 percentage points, Montana will begin to chug forward with noticeable vigor as 2010 unfolds.
"A lot of recovery will begin next spring and summer," Swanson said. "I expect a return to normalcy by next summer and we will probably
be back in two years
to 2.5 percent unemployment."
"Our economy has grown so fast," he explained, "and this slowdown won't stay with us very long. We are in a good economy, one that a lot of other places would want."
Swanson used his prognostication to introduce the most vibrant sector of the Missoula economy - health care, which was the focus of his presentation.
Driven by the region's growing popularity during the past decade, the health care industry has steadily climbed to the top of the charts that measure labor earnings and employment.
Today, health care is the single largest sector of the area economy with labor earnings exceeding $400 million a year, up from $343 million in 2001, Swanson said.
"This is huge," he said. "Health care is the largest generator of employment earnings and growing faster than any other sector."
By comparison, retail trade, the county's second highest ranking economic sector, generates $256 million annually in labor earnings.
The $400 million industry here makes Missoula's health care economy the largest in the state, and the 22nd largest among the nation's 366 metropolitan areas, Swanson said.
Among all communities with a population of 160,000 or less in the West, Missoula ranks No. 1 for being the most dependent on the health care economy.
The top administrators at Missoula's two hospitals were at the forum to help explain their industry. Both said that Missoula's specialized health care services attract patients from across the state and region.
Fifty percent of the patients at Community Medical Center are residents who live outside of Missoula County, CMC president Stephen Carlson told the audience. The number is the same for St. Patrick Hospital, said Jeff Fee, hospital president.
Not only do the facilities serve thousands of patients each year, from North Dakota to Washington, CMC employs 1,200 people and St. Pat's 1,650. CMC's payroll puts $51 million in the local economy and St. Pat's adds another $62 million.
Although population trends are difficult to track with any degree of certainty, Swanson is confident of some trends that are significant for the local economy and the future of the hospitals and other health-related businesses, such as nursing homes and rehabilitation services.
As western Montana's largest population cluster - baby boomers - ages, there will be increased need for aging-related services. Because the children of boomers are now raising families of their own, there will be a slight increase in the number of babies born and the number of young children in Missoula.
"Over the next 20 years, we will hear other communities talk about what to do with their schools because there are no children, and only a few places will have growth," Swanson said.
These factors are critical to weigh as Missoula considers its future and the local hospitals respond to the changing face of its clientele.
"Successful economic development has to reflect our strengths and weaknesses," Swanson said. "We need everyone to think about the larger community and where it is going and where it can go."
There are many issues surrounding Missoula's robust health care industry, shifting age patterns and work related to those issues, Swanson said.
He listed them: Missoula needs infrastructure improvements. Growing and maintaining an educated, quality work force is crucial. The city needs to clearly acknowledge its various economic clusters and commit to side-by-side workforce development programs that are customized for those interrelated business clusters.
"Most economies don't know their clusters," Swanson said. "And by knowing them, everyone is much better at planning and being successful."
Planning, he said, helps create sustainable, quality jobs in the area.
While he is pleased to be part of Missoula's health care services, which have earned international recognition and national accolades, Fee said he has real concerns about health care's leading role in this community.
In a world that is becoming more global and therefore smaller, he said, it behooves Missoula's economy to be more external.
"I don't necessarily believe it's a good thing that health care is No. 1 in Missoula County," Fee said. "If we are going to stay competitive on the global scene, we really need a way to support other industries."
Reporter Betsy
Cohen can be reached
at 523-5253 or at bcohen@missoulian.com.