Analyst says unequal economic recovery presenting challenge for state

At midyear, the numbers show quite a few forks in the road to recovery for various sectors of the Montana economy.

"Boy, was it intense," Pat Barkey said Thursday of the recession caused by the COVID-19 pandemic. The director of the Bureau of Business and Economic Research at the University of Montana, Barkey was a keynote speaker at an economic forum hosted in Kalispell by the Montana Chamber Foundation.

Barkey was tasked with recapping the recent economic tumult, characterizing the ongoing recovery and predicting how those trends could play out in the second half of the year.

His presentation put hard numbers to the experience many Montanans have gone through in the Flathead Valley and beyond: Recovery has been strong, but not for everyone.

On the one hand, there's evidence of resiliency.

Barkey said Montana’s gross domestic product declined 32.5% in the second quarter of 2020, only to bounce back even higher — by 33.44% — in the third quarter.

The state already has exceeded pre-pandemic GPD growth, and Barkey predicted those numbers will only continue to trend upward.

But that growth doesn't include all Montanans in equal parts.

Based on Barkey's observations, it seems as though categories such as industry, location and gender have played outsized roles in determining financial outcomes for various Montanans grappling with the economic fallout of the coronavirus pandemic.

"That is fewer Montanans making collectively a lot more money," he said.

Women, for instance, have faced far higher rates of unemployment than men as a result of the pandemic.

Prior to COVID-19, women made up about 20% of unemployment claims every month in Montana. Since the onset of the pandemic, women have accounted for more than 50% of those claims.

That's because the pandemic cut more sharply into careers that typically employ women, and school closures had a disproportionate effect on the female workforce.

"It's really tragic," Barkey said. "That is only recently starting to come back."

INDUSTRY CATEGORIES have played another crucial role in influencing pandemic recovery.

The Montana Chamber Foundation identified bioscience, technology and manufacturing as the three sectors shining the brightest in the state's recovery.

Agriculture, mining and accommodations haven't been so lucky.

"Ag is a big issue," Barkey said. "It's a gigantic issue."

The ongoing drought threatens to make that problem even worse.

While Flathead County has less of an agricultural foundation than many other Montana counties, the local business landscape faces other issues.

Barkey said accommodations and food experienced the most job losses of any industry in the state, and there's a limit to how much those can realistically recover.

Reopening provided a boon for restaurants and bars, for example, but as Barkey pointed out, "You can only open once."

The opportunities for continued growth in that sector — one of the primary employers in Northwest Montana — are limited beyond that initial reopening boost.

THERE ARE plenty of other individual differences that complicate the rosy picture suggested by Montana's solid GDP growth.

Montana’s median home price, for instance, is up a staggering 34.3% compared to this time last year.

That increase creates more difficulties in finding housing for certain segments of the population compared to others; working people, in particular, are struggling to afford housing in the booming market, and that's contributing, in turn, to a workforce shortage.

Barkey seemed surprised to report Montana has had more job openings since February 2020 than any other state.

"Opening has done fantastic for Montana, unless you're trying to hire somebody," he said.

Going forward, Barkey is optimistic about possibilities for recovery, although there's no guarantee the distribution will even out.

"We certainly didn't lose the capacity to grow, both in terms of financial and opportunities," he said.

"I think this is going to be a big year," he added. "There's no cooling-off of the economy right now."