Montana’s economy is expected to grow faster in 2015 than it did in 2014, in terms of employment and personal income, according to an economic outlook report compiled by the Federal Reserve Bank of Minneapolis.
Each year, the bank uses a statistical model to predict a variety of economic factors for Minnesota, Montana, North and South Dakota, northwestern Wisconsin and the Upper Peninsula of Michigan, which combined are called the 9th District.
The bank believes that employment in Montana will grow by a solid 1.9 percent in 2015, while the unemployment rate is predicted to drop from 4.3 percent in November 2014 to 3.6 percent by the fourth quarter of 2015.
“The economy in Montana grew at an average pace in 2014, but it looks like growth will increase in 2015,” said Toby Madden, a regional economist at the Minneapolis Fed.
Madden said personal income for Montanans is expected to grow by 4.7 percent in 2015. That would be the biggest increase since 2012, when personal income grew by about 5.6 percent.
The rate for new housing permit authorizations is expected to be down by 18 percent.
“However, that’s a highly variable statistic,” Madden said of the housing permit growth rate.
In addition to the forecasting model, the Montana economic outlook includes information from an annual poll and survey of 315 businesses and 538 manufacturers. The poll and survey were mailed out in early November and returned by Dec. 8 of last year.
Madden said that Montana respondents to the manufacturing survey expect increased consumer spending, business investment and employment. However, respondents to the business outlook poll predict modest increases in business investment and employment, but relatively flat consumer spending.
“Business leaders expect sales to be flat,” Madden explained. “We don’t get as much optimism from them as we’ve had in the past.”
Regarding their individual operations, business poll respondents expect flat activity, while the manufacturing survey respondents expect increased capital investment in 2015. Manufacturers also expect to see higher sales and prices this year.
“The manufacturing survey and the statistical model both suggest solid economic gains for Montana in 2015,” Madden said. “Manufacturer survey respondents are generally more optimistic than the respondents to the business poll.”
For more information on the bank's forecast for the 9th District, visit minneapolisfed.org/economy/data-and-forecasts/ninth-district-forecasts.