Community News

The 2015 Economic Outlook seminar, prepared by the University of Montana Bureau of Business and Economic Research, recently made its annual stop in Bozeman. The statewide and local information presented in this article was gleaned from the material presented and some are, in fact, verbatim.
 
To start with the big picture, there was discussion about the national economic conditions with highlights including evidence of stronger, more bullish activity in the small business market and the best six-month performance rating of the U.S. economy since well before the recession. Quarterly job growth is strong, and the number of those who are working part-time for economic reasons is declining.
 
Shifting to our state's economic growth, it is reported as slower, yet well-balanced. The overall statewide outlook for 2015 is encouraging in that individual spending is up, unemployment is down, household debt has decreased, the dollar is stronger, and the intent to travel is positive. Though the good news is a common thread in Montana's current state of economy, Gallatin County is certainly a shining star. For instance, real wage growth in Gallatin County is almost double the number of the remainder of the state. The national unemployment rate at the end of 2014 was 5.8%, 4.2% in Montana, and 3.7% in Gallatin County.  Our state's population growth from 2010-2014 was 3.4%, compared to a very substantial 8.6% in Gallatin County. The population is projected to continue growing at 5% per year or more for the next few years, which is the highest rate in the state among the larger cities.
 
Nonresident visitation to Montana remained extremely high in 2014 with the preliminary numbers weighing in at over 11 million visitors for the second year in a row. According to 2012-2013 statistics, Gallatin Country led the state with over $666 million in nonresident traveler spending, with Flathead coming in second at over $518 million. 2014 visits to Yellowstone National Park were up 10.2% and to Glacier National Park were up 6.7%. Montana ski area visits were also reported as higher than in previous years. Airport deboarding was up in every market around the state except Helena, with once again the Bozeman Yellowstone International Airport leading the total numbers.
 
To drill down on the housing outlook, it was presented that real estate is still a key driver in the economy. Nationally, first-time home buyers are on the decline for several reasons including the low inventory of affordable housing, difficulty in meeting mortgage underwriting standards, and down payment requirements. In 2014, only 33% of home purchases were first-time buyers which was the lowest number recorded in 27 years. Buyer demographics are changing in that the median age of home buyers has been rising, from 36 years in 2001 to 44 years in 2014. The flip side is that the Montana housing market is outperforming the nation according to the third-quarter sales numbers.  Data from our top seven markets showed a 4.36% increase in sales versus only 2% in the U.S.  Continued growth since the low figures of 2009 are expected in all major markets for both number of sales and prices. Once again, Gallatin County reported the highest number of units sold and average price.
 
Montana State University always deserves a nod when discussing positive attributes of the Bozeman area. The official Fall 2014 enrollment number of 15,421 was a new record and also followed the pattern of increased admission in eight of the last nine years. Hiring additional faculty and constructing both the Jabs Hall and the Norm Asbjornson Innovation Center demonstrates MSU's commitment to excellence. With growth also comes the challenge of adequate housing. This is one of the factors that keep new construction, especially for duplex or multi-family housing, robust in Bozeman.  Building permits are posted by the City of Bozeman and run on a July 1st to June 30th fiscal year. Through January 2015, new construction permits for 11 duplexes and 27 multi-family units were issued for a total of 324 housing units. Last year at the same time there were permits issued for 423 units.  This is substantial building activity with the impact still to come, as most of these larger projects take 18-24 months of construction before the apartments become available to rent.