Collectively, we are called the 9th District and our economies are monitored by the Federal Reserve Bank of Minneapolis, which is one of 12 regional banks that, together with the Board of Governors in Washington, D.C., make up the Federal Reserve System - the central bank of the United States.
On Wednesday, the Minneapolis Fed issued its 2009 economic outlook for the 9th District.
The outcome? Montana doesn't have a lot in common with its regional compadres.
In 2009, Michigan's unemployment rate is forecast to hit double digits, Minnesota will hover around 7 percent, Wisconsin will be close to 6 percent - and Montana and the Dakotas will be around 4.2 percent.
“Montana is pretty strong after being battered by a five-year drought,” Madden said. “And recently it is pretty strong on the energy, mining and tourism side of things,” he explained. “With natural resources being strong over the last few years, Montana and the Dakotas are faring pretty well compared to the rest of the district.”
However, there are two significant caveats, Madden said.
Statistical data for November and December aren't yet available, and therefore weren't used in the projections.
To help better understand that not-yet-collected data, in November the federal bank surveyed business owners and companies in the region to get an on-the-ground feel for what is happening.
“The survey results are not that great,” Madden said. Some 39 percent of Montana's respondents to the business outlook poll expect sales to be down, he said, while 33 percent expect sales to be up.
“On employment, 37 percent said they are going to decrease and 15 percent say employment will be up.”
The survey information paints a different picture than what the statistical models indicate, Madden said.
What it means, he explained, “is the forecast numbers might be more optimistic than what actually occurs.”
One of the best indicators of the overly optimistic federal picture is information relating to new construction in Montana.
Construction in Montana was vigorous, but it did not boom in 2008 like it did elsewhere in the country, Madden said. And the nationwide downturn in the housing market that started four years ago didn't slam Montana like it did elsewhere.
“However, when we asked people from Montana, 87 percent said housing was going to be down and 13 percent said it would be unchanged,” Madden said. “Nobody said it would be up.”
How 2009 shakes out remains to be seen. But there's one thing for certain.
“Montana doesn't necessarily follow all the national trends,” Madden said.
Reporter Betsy Cohen can be reached at 523-5253 or at bcohen@missoulian.com.
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Andy B. Hammond wrote on Dec 18, 2008 3:45 PM:
" Matthew,
I have to agree with you. The Missoulian likes to run articles about how Missoula or Montana seem to always avoid economic problems that the rest of the country are experiencing.
Sure Montana and Missoula are special places but, come on, we have the same problems as the rest of the country. I see it and hear about it every day here in Missoula.
You have to question the credibility of The Missoulian and Betsey Cohen. "
I have to agree with you. The Missoulian likes to run articles about how Missoula or Montana seem to always avoid economic problems that the rest of the country are experiencing.
Sure Montana and Missoula are special places but, come on, we have the same problems as the rest of the country. I see it and hear about it every day here in Missoula.
You have to question the credibility of The Missoulian and Betsey Cohen. "
Matthew Koehler wrote on Dec 18, 2008 9:41 AM:
While mining is listed as one of the strong areas, some of the biggest mining operations in the state ( (Stillwater Mine, Troy Mine, etc) have laid off nearly a thousand people because metal prices and demand have declined sharply. The same thing in happening in the timber industry.
I also have to take exception to the information regarding housing construction. The article states, "Construction in Montana was vigorous, but it did not boom in 2008 like it did elsewhere in the country.'
What? The US had a construction "Boom in 2008"? That should be "bust" shouldn't it? As in the worst housing market since the Great Depression?
Fact is, according to a recent article that appeared in the Missoulian, new home starts have dropped 37 percent in Ravalli County, 33 percent in Missoula County, 35 percent in Flathead County, 50 percent in Bozeman and 97 percent in Belgrade.
To effectively deal with this economic crisis, we need to be able to look at it squarely. Fact is, all indications are that 2009 is going to be much rougher and over the next few months we'll see increased layoffs across the board in Montana. How the Missoulian can print an article talking about a "optimistic economic outlook" is bizarre. "