Economic Update: Growth ahead, but uncertainty still remains

"A riddle wrapped in a mystery inside an enigma," one of the many quotable quotes of Winston Churchill, is how the University of Montana's Bureau of Business and Economic Research Director Patrick Barkey opened the annual Midyear Economic Update for 2023 at NorthWestern Energy's headquarters in Butte on Tuesday. 

Among the data Barkey presented at the seminar, which serves to update the national, state and local economic forecast given in February of each year, is that the Treasure State's growth is still among the fastest in the nation. And, according to data released last week by the Montana Department of Labor & Industry, Anaconda-Deer Lodge County still ranks highly in Montana, exceeding the state average for unemployment and posting significant growth in both population and jobs (see story "ADLC adds nearly 200 jobs in the past year" on Wednesday, July 26, 2023). 

And yet, also among that data was that wage growth in the Butte and Anaconda area has not kept up with Bozeman, Billings, Missoula, Helena, Great Falls or the Flathead, hovering at around 1-2%, which is below the rate of inflation. While wage growth in finance and business services, construction and accommodations is high in Montana, health care is being left behind, Barkey said. 

Additionally, housing, food and transportation costs continue to be the biggest contributors to inflation, with each of those up 20% or more since 2020, while state tax revenues have flatlined and property values used in tax assessments are are up significantly. ADLC's 

Todd O'Hair, the director of the Montana Chamber of Commerce, the first speaker at Tuesday's seminar, called the property tax issue "untenable" and that tax reform would be one of their top priorities at the next legislative session.

"If we don't do something about this soon, we'll have a major taxpayer revolt," O'Hair said.

Even amidst all that, however, Barkey said the earlier fears of a recession had been headed off, that economic growth was up 2% and the projection is for 1% growth through the rest of the year. 

The Anaconda Leader will have more on these and other economic matters in upcoming editions. More information about the seminar is available online at https://www.economicoutlookseminar.com.