Slow growth predicted for 2015

The Flathead Valley economy is expected to see a year of slow growth in 2015, according to predictions given last week at the Montana West Economic Development annual economic forecast in Kalispell.

“There are no signs we’re going into a recession,” said Brad Eldridge, executive director of institutional research at Flathead Valley Community College. “I think we’re going to grow in 2015.”

There are a number of factors that could impact the area’s economy including interest rates, oil prices and the strength of the Canadian dollar impacting tourism and real estate, he noted.

Tourism in the Flathead Valley supported more than 6,000 jobs in 2014.

“Tourism held us up through the recession,” Eldridge said. “It absorbed the shock of the ups and downs in the other industries.”

The tourism industry shouldn’t be discounted for creating seasonal jobs, he added, tourism brings in outside dollars into the economy, which supports higher wage jobs.

However, the value of the Canadian dollar has decreased, which could create a decline in the number of people crossing the border. This could also impact the construction industry as people look to purchase second homes.

“We attract people who want to live here, but not work here, because of that construction is a leading indicator of our economy,” Eldridge said. “If the Canadian dollar buys less of a home in the Flathead that can affect the construction industry.”

Construction employment is still down from its 2007 peak, but it has been growing since 2011.

The wood products industry is strong with employment up slightly last year, but that industry is “double sensitive” to outside factors including the local real estate market and national housing trends.

Eldridge cautioned that many of the risk factors may not come to fruition.

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

From 2012-13 to 2013-14, the employment rate was up 1.6 percent with 604 jobs added to Flathead County. Eldridge predicts 1.6 percent employment growth in 2015.

“That’s not bad, but it’s nothing to pop the champagne cork about,” Eldridge said.

Barbra Bennett and Ellie Clark, private appraisal consultants, took a look at real estate trends in the Flathead.

During 2014 the county had its highest number of residential sales since 2006 and the median sale price is up 3 percent from 2013.

“That is a great sign,” Bennett said.

Both Columbia Falls and Kalispell saw an increase in the number of home sales during 2014, but Whitefish sales actually dipped below sales levels for the year before.

There were 109 homes sold in Whitefish last year, but the year before Whitefish sales hit 120 homes.

Bennett pointed out that in Whitefish the median list price for homes is 54 percent higher that the median sale price for 2014.

“Sellers expectations are not in line with what buyers can afford or are willing to pay,” Bennett said.

Building permits issued last year for new single-family residences was a mix across the three municipalities.

Whitefish stayed almost even with 72 permits issued last year compared with 75 in 2013. Kalispell saw a decline in permits from 124 to 98 last year. Columbia Falls increased from eight permits to 21 last year.