BILLINGS - This medium-sized city on the mountainous edge of the eastern plain, with an economy better than most, has waited since the Great Recession began for the other shoe to drop. When it did this year, that shoe turned out to be a work boot.
Not only have the key industries in Billings weathered the toughest economic times the nation has seen in 80 years, they've actually done well.
Crop or cattle prices have hovered near record-high territory in each of the last five years. Local oil refineries continue to make capital investments and will boost local employment by more than 800 jobs in the next six months as plants are disassembled and retooled for better operation. A 25-story crane will appear on the Billings skyline in early 2012 as workers begin installing new coker drums at the ConocoPhillips refinery. The community medical industry, which serves an area of Montana and Wyoming spanning more than 300 miles, has rolled out one expansion project after another for the last four years.
The unemployment rate is hovering around 5.3 percent, below the state average of 7.6 percent and the 9 percent national rate.
"A guy from NPR (National Public Radio) called the other day wanting to know how Billings has outperformed the nation throughout the recession. It's generally because it's more diversified than the state economy, but the energy growth is really driving it," said Barbara Wagner, senior economist with the Montana Department of Labor and Industry's Research and Analysis Bureau. "That leads to a lot of growth in the retail industries. In the Billings area, you can see that."
Billings has seen its share of national retailers, such as Borders Books, turn their lights out locally, but it's also seen other merchants go big in 2011.
Scheels sporting goods rolled out plans this fall for a new 220,000-square-foot store, complete with a 65-foot Ferris wheel and a 16,000-gallon saltwater aquarium and a U.S. presidents sculpture gallery. The blueprint also calls for 200 new store employees.
Scheels is being built at Shiloh Crossing, Billings' newest shopping center, which was also built during the economic slump.
The development should help the store compete with national outdoor sports megastore Cabella's, which also pushed ahead with a new Billings store even as Montana hit its recession low point in 2009.
"We think Billings is the best market in Montana for Scheels and we're going all out," Steve Scheel, store CEO, told the Billings Gazette when announcing its plans. "If things happen in Montana, they happen in Billings, just like they happen in Fargo," Scheels' home base.
Retail and wholesale business accounts for 14 percent of the labor income in Yellowstone County; that's a bigger slice of the economic pie than those sectors represent in any of Montana's six most populated areas. That retail economy in Billings generates about $2.4 billion in sales each year, according to the 2007 U.S. Economic Census. That means $1 out of every $7 spent on retail purchases in Montana is being spent in Billings. The percentage of wholesale business transactions done in Billings is even stronger at more than $2.2 billion. That's slightly more than a quarter of the wholesale business for the entire state.
Eric Esp knows that out-of-town consumers drive a lot of the community's wholesale
and retail trade. A quick glance at the out-of-county license places in the parking lot of Costco tells the John Deere dealer a lot about where the community's dollars are coming from. When those vehicles are sporting a little dried mud on their flaps, that's a sign to Esp that the region's farmers and ranchers are in town stoking the Billings economy.
"Agriculture is the backbone of our economy," said Esp, who has seen sales of new and used farm machinery significantly strengthen over the past several years as crop prices have remained strong.
The oil exploration economy is also fueling local business as drillers in the Bakken oil formation and even the Canadian oil sands turn to Billings for skilled workers. Bay Ltd., a metal fabrication company that builds oil equipment, expects to create 200 new jobs at its Billings location by the middle of next year. At full strength, Bay's annual payroll in Billings would reach $10 million. In Yellowstone County the manufacturing sector, anchored by three oil refineries, is the biggest contributor to labor income, at 17 percent.
Health care is the other major driver of Billings' economic activity, and the medical industry has been in a constant expansion mode throughout the recession. The medical economy in Billings is the state's largest and clinic expansion and elder care are two areas that have posted rare positive growth for Montana's economy.
The Billings medical community added four new specialty treatment clinics over the last three years and is about to add a fifth.
Riverstone Health, the designated provider of Yellowstone County public health services, is planning to build an $8 million clinic in Billings for care and training.
Wagner is forecasting that south-central Montana, anchored by Billings, will be the state's fastest-growing region from now to the end of the decade, picking up about 3,000 new jobs over that period. If the region follows form, it will be back to pre-recession job levels by next year, Wagner said, roughly eight years before northwest Montana reaches pre-2007 employment levels and four years ahead of southwest Montana.
Reporter Tom Lutey can be reached at (406) 657-1288 or at email@example.com.