2015 could be uncertain for local economy

Several main factors could put a damper on economic growth in the Flathead Valley, according to Montana West Economic Development’s annual economic forecast meeting on Wednesday.

“There are a lot of moving parts to our economy,” said Brad Eldridge, executive director of institutional research at Flathead Valley Community College. Tourism, oil prices and interest rates are primary factors that could determine the area’s economic prosperity during 2015. 

In 2014, the tourism industry in the Flathead Valley supported over 6,000 jobs, including those in food service, hospitality, entertainment and recreation, according to Eldridge. 

“The tourism industry has always held up our economy here, and helped it to grow since the recession,” he said. “It has absorbed the shock when other industries decrease.” 

The value of the Canadian dollar has decreased in recent months, which could cause a decline in the number of people who come south across the boarder. In addition, the U.S. dollar has strengthened, which could deter international visitors. 

Interest rates are expected to begin increasing this year, which may have an effect on people buying homes or making other large purchases throughout the next few years.  

The sharp drop in oil prices could hurt the Bakken oil fields, as well as those in Alberta, which could produce a ripple effect in the Flathead Valley. 

Eldridge cautioned, however, that many of these are ‘what-ifs’ that may not come to fruition. 

“There seems to be an excess of uncertainty heading into 2015,” he said. 

The local unemployment rate has decreased in recent years, although the rate of job growth has slowed in recent months. However, Eldridge said this is no cause for alarm.

“It’s really slowed down, in terms of employment growth, but it’s not shrinking,” he said. “We’re not in crisis mode by any means, but it has slowed.” 

From the third quarter in 2013 to the same time in 2014, 604 new full-time wage and salary jobs were added in the Flathead Valley. Overall, the employment rate increased 1.6 percent during that period. 

For this year, Eldridge predicted steady employment growth of 1.6 percent, slightly below the predicted state average of 2 percent growth.  

The strong wood production and manufacturing industry bodes well for the local economy. The number of people employed in those sectors in Flathead County is seven times larger than the national staffing average for an area this size. 

“Overall, our economy has outperformed the rest of the country,” Eldridge said.