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Economic forecast predicts slow growth for state

by CARL FOSTER
Daily Inter Lake | February 7, 2024 12:00 AM

A period of “slow growth is next” for Montana following years of fast-paced activity in the economy.

This was the summary offered by Patrick M. Barkey, the director of the Bureau of Business and Economic Research at the University of Montana, at the 49th annual Economic Outlook Seminar Tuesday at the Wachholz College Center at Flathead Valley Community College. 

Barkey along with a team of experts provided an economic analysis for the state as it made its seventh stop on a statewide tour.

In Montana, the economic spikes caused by in-migration, the pandemic, and the financial crisis of 2007 have all mostly healed and Montana’s economic progress is back on a gently rising track similar to where it was in 2003, Barkey insisted, despite projections.

The market on almost all fronts is stable, according to Barkey, easing fears of recession and a global growth slowdown.

“Bad forecasts have been wrong,” Barkey said, acknowledging workforce shortages in crucial industries like health care and construction while praising growth in the state’s general fund, job market and government investment incentives.     

“We’ve got to find some way to make health care jobs less stressful and more compatible with what people are looking for,” Barkey said.

Providing a local perspective, James Williamson of Sage Strategy & Appraisal and board member with the Kalispell Chamber of Commerce displayed a graphic reading, “Kalispell is growing up, steady as she goes.” He detailed a population increase from 28,450 in 2022 to 31,212 in 2023 for the city and a push of the average household income over $70,000 in the process.

“Kalispell’s cost of living is lower than Helena, Missoula, Bozeman,” Williamson listed off, deeming conditions “relatively healthy.” 

Predicting similar growth in 2024, Williamson said the focus of the chamber will stay the same in helping the workforce, and engineering solutions for housing and child care.

Following the theme for the seminar of “Implementing the Green Energy transition: What will it take?” the discussion also looked at the opportunities and challenges facing the transition from fossil fuels to less carbon-emitting energy. 

Barkey called this transition “the death of big oil and the birth of big shovel,” referring to a potential future of modernized, zero-emission infrastructure and to increase statewide mining for the copper, palladium and zinc to make it all run. 

Jason Merkel, vice president of distribution at Northwestern Energy, promoted a vision of energy transition that is “reliable, sustainable, and affordable” in reaching the company’s goal of becoming net zero by 2050.  

“Montana’s carbon-free supply is 58% with electric resources, where the national average is 40%,” he said. “So we are starting at an advantage.” 

Merkel pointed to the recent cold snap as the type of challenge Montana faces, a “capacity crisis.” He stated that freezing water slows hydroelectric generation, and battery storage isn’t adequate to last during a lengthy cold snap.  

A panel discussion put the voice of mining next to the voice of environmental regulation.

Sonja Nowakowski, administrator with the air, energy and mining division of the Montana Department of Environmental Quality, traced Montana’s economic foundations from mines and mills that gave rise to dams, energy, and the “advent of rural electrical cooperatives,” finally creating a situation where Montana could mine copper and rare earth elements to achieve zero emission energy independence in the future, if done responsibly.  

The state agency has established a task force that will look at the Montana Environmental Policy Act to propose adjustments to the 1971 law to modernize and improve it. 

She described MEPA as procedural, a “look before you leap” law that allowed the public to scrutinize the impact of decisions, but which Nowakowski says in some ways “no longer meshes with reality.” 

Heather McDowell, vice president for legal, environmental and government affairs for the U.S. region at Sibanye-Stillwater, the owner and operator of the Stillwater and East Boulder Mines in the Beartooth Mountains pointed out that on a good year, the company is 6% of Montana’s economy, producing the only platinum and palladium mined within the United States — materials that are necessary for modern devices and fuel cells.

“MEPA is polarizing, but it doesn’t have to be,” she said. “We have to find a way to get past that it is going to cause litigation before we have no energy projects, no mines coming online because we couldn’t sit down and agree to be reasonably regulated.” 

Reporter Carl Foster can be reached at 758-4407 or cfoster@dailyinterlake.com.