Employment numbers in state looking good

Statistical graphs really tell a story with just a quick glance. As referred to in sales, “up and to the right” is good. That means there is growth in that department.

I’ve looked over the July issue of “Montana Economy at a Glance,” which is published by the Montana Department of Labor & Industry’s Research & Analysis Bureau. The graph that shows where nonfarm employment in the state has been and is going is impressive.

In seasonally-adjusted figures, nonfarm employment rose from about 396,000 in July of 2002 to 448,500 in July of this year. The chart shows steady growth over the five-year period.

The comparison between Montana and the nation as a whole in labor force participation is quite significant. Over the last three years, Montana’s numbers have been well above the national average. There was a peak in Montana numbers last summer, with a mark of 67.3 percent. The state continues to outpace the rest of the nation in the percentage of its population who are working or seeking work.

Going hand-in-hand with that evaluation, Montana’s unemployment rate has dropped from 4.5 percent in mid-2002 to 2.7 percent in July of 2007. We had a low of 2 percent early this year. In Flathead County, the unemployment rate was 2.1 percent. In comparison, the U.S. unemployment rate has dropped over the last five years, but not as much as in Montana. The U.S. rate in July of 2007 was 4.6 percent.

Where is the growth in employment? According to the Research & Analysis Bureau’s publication, new restaurants, shopping centers and office buildings are appearing in most cities. Kalispell is now what I consider to be a “small city,” and we can see the growth there. There were more than 1,100 new private businesses added between 2005 and 2006 in Montana, and that means more jobs. Private sector employment grew from 3.6 percent from 2005 to 2006, and 12.9 percent from 2001 through last year. The Bureau warns, though, that employment growth does not reflect the quality of jobs created. That is a concern.

In the analysis, sectors that increased their share of employment were considered expanding sectors. Those that decreased were contracting sectors. There were 38 expanding industries and 53 contracting industries. The change in jobs expanding was an increase of 7.91 percent while the change in jobs contracting was a rise of just 0.99 percent.

The contracting sectors had higher total wages of about $5.98 billion and a growth rate of 5.9 percent. Total wages for the expanding sectors grew by 13.66 percent to $4.19 billion. While the contracting sectors contributed more in total wages, the expanding sectors’ average wages were higher and total wages grew more quickly, according to the report.

Leading the way among the top expanding industries in the state is “administrative and support services,” followed by “specialty trade contractors.” Among contracting industries, the leader was “food service and drinking places,” and “repair and maintenance” was second. That was based on change in share of statewide employment.

In a nutshell, the sectors that are gaining employment share in Montana’s economy pay higher wages than sectors that are losing employment share. The Bureau said that the new jobs being created are more likely to be higher quality and should help to improve the economic well being of people prepared to take advantage of these employment opportunities.

Joe Sova is managing editor of the Hungry Horse News.