It was a good year to be a construction worker in Missoula.
The Garden City was the only urban area in the state to see wage growth accelerate in 2017, mainly due to the frenetic pace of construction of commercial projects, public school additions and multifamily housing.
That was just one of the interesting tidbits a huge crowd learned at the 2018 Economic Outlook Series presented by the University of Montana’s Bureau of Business and Economic Research on Friday at the Hilton Garden Inn in Missoula.
Patrick Barkey, the director of the BBER, said that although agriculture revenues fell across the state last year, most urban centers in Montana managed to “tread water” or register some growth in 2017. Key industries such as health care, tourism and technology saw especially high growth.
“The pattern of growth continued to tilt westward with places like Missoula and Ravalli counties joining the likes of the already high-flying Flathead and Gallatin counties,” Barkey explained for his report on the statewide economy.
“The Missoula economy has quietly emerged from under-performing in the immediate aftermath of the Great Recession to growth in the past two years that is on par with Flathead County. Professional business companies, such as technology consultants ATG, also played an important role in boosting wages faster than jobs.”
According to Barkey, the drop-off in University of Montana enrollment has been partially offset by increased research activity, although he said “reductions” appear to be coming.
“To the immediate south, Ravalli County has enjoyed faster growth, which led to a rebound in real estate and construction activity,” he said.
Although Gallatin County’s wage growth ($138 million) is still far higher than Missoula County’s, Missoula County was the only specific county in the state where wage growth in 2017 (roughly $115 million) was higher than 2016 (roughly $90 million).
The City of Missoula’s Development Services office recorded a record $277 million in permitted construction activity last year, shattering the previous record of $248 million the year before.
When taking into account rural areas, wage growth did increase statewide from roughly $30 million in growth in 2016 to roughly $60 million in 2017.
The crowd also got insights into agriculture, one of the state’s most important industries. Montana leads the nation in production of organic wheat and organic pulse crops, which include lentils, beans and peas. They earned the state $28.4 million and $5.4 million in revenue last year, respectively.
Kate Fuller, an economist with Montana State University’s Department of Agricultural Economics, said Montana farmers are just beginning to realize the potential of large-scale organic wheat and pulses.
“Talking to producers, this is something that is relatively new,” she said. “In some ways it’s a matter of integrating 100 acres to a much larger operation. It’s converting a small section of a large wheat farm into organic production.”
Montana’s organic wheat accounted for 27 percent of all U.S. sales, and the state’s organic pulses were 55 percent of all national sales.
Those numbers would have been far more consequential had there not been a severe drought across the state last summer.
The lack of rain lowered the average yields on grain (spring wheat, winter wheat, durum and barley) by 33 percent and pulse yields by 44 percent from the previous year. Only the modest upward price movements for those crops helped mitigate production declines.
Montana actually led the nation in pulse crop acreage planted last year, at 1.5 million acres.
Fuller wrote a new report on Montana’s ag economy with fellow economist George Haynes. She said that the news was better for cattle producers in Montana this year, as calf prices increased 15 percent over 2016. However, pasture conditions were poor because of drought and that means cattle were shipped to market earlier, weighing less.
“The last few years have been a pretty wild ride for calf producers,” she said. “Around 2014 was some of the best years they’ve ever seen and then in 2016 they really plummeted below that long-term average. This year we did see an uptick.”
Montana can now ship beef to China after a trade deal was struck by Congress, and that should be good news for cattle producers, she said.
“Futures markets are predicting that prices will dip lower again,” she said.