Montana’s economy has been growing faster than the national average since the beginning of the century, including performing reasonably well during the 2007-08 recession. The stable economy is evident in almost every economic metric. The unemployment rate has remained lower than the national average since the turn of the century. Although its GDP of about $50,000 is the third smallest in the United States, Montana has the 18th fastest growing economy with an annual average growth of about 3.2%. Montana is a hub of microbrewing, ranking third in the number of craft breweries per capita. Mineral resources in the state include gold, silver, coal, vermiculite, and talc. Millions of tourists flock to Montana to visit Glacier National Park, Yellowstone National Park, Flathead Lake, and many more attraction sites. Montana’s economy is dominated by agriculture, mining, healthcare, forestry, service, and energy production. The service industry employs about a third of the workforce. The manufacturing sector accounts for about 7% of the GDP, but agriculture, real estate, and mining make up for the shortfall. Transport and logistics are a vital part of the economy because of the state’s large size and rural nature. Healthcare, leisure activities, and trade employ about 45% of the labor force, while the government employs about 19%. The following are the biggest industries in Montana.
Agriculture And Forestry
Montana’s fertile lands make it ideal for agriculture. There are about 28,000 farms spread across approximately 59.7 million acres. Farms in Montana are relatively large, averaging 2,134 acres each. Beef cattle, grain, sheep, fruits, potatoes, and sugar beets are produced on irrigated farms along the valleys of the Rocky Mountains and Great Plains. Barley and wheat are grown on extensive farms throughout northeastern Montana and the Golden Triangle. Apart from a few patches where crops are grown, the rest of the state is used for livestock rearing. Montana’s top agricultural exports are cattle and calves, wheat, hay, barley, and lentils. Lumbering and the production of forest products thrive in western Montana. Federal and state governments own about half of the 13 million acres of forest land.
The healthcare industry employs about 68,000 people. It is also one of the fastest-growing components of the economy, with an annual growth of about 2.8%. Healthcare employment has remained steady even during the recession when other sectors record job losses. The sector is expected to continue rising as the state’s population continues to increase, and the elderly demand more service. Experts estimate that an additional 1,300 medical professionals are required annually to maintain the quality of service. Healthcare spending has consistently grown faster than the state economy since the mid-1960s. In 2016 the state modified the Medicaid program to benefit households with income of up to 138% of the poverty level, children, and pregnant women. The impact has been phenomenal, with the program covering over 91,000 people against an expected figure of 70,000.
As the nation shift toward energy independence with energy-driven manufacturing, low energy intensity, reduced greenhouse gas emission, and lower consumer costs, Montana has not been left behind. The state’s energy resources consist of coal, oil, wind, and hydro. In 2018, Montana spent about $200 million to develop the industry. Although there is progress in developing renewable sources, the state is highly dependent on coal and oil for energy. Energy use per capita in the state is among the highest in the country, a feature that has been attributed to long driving distances and cold winters. Employment patterns in the industry continue to change due to the boom and bust cycles but have remained relatively stable since the last recession.
Employment opportunities in the manufacturing sector have grown faster than the national average since the Great Recession. Between 2010 and 2018, federal employment rose by 8% while employment in Montana rose by 21.3%. The industry remains strong despite closures of several firms such as Smurfit-Stone paper mill. The facility was the largest manufacturing firm in Montana. The sector was also strengthened by acquisitions made by several national and multinationals. As of 2019, there were about 1,400 manufacturing establishments in the state, the largest being fabricated metal products (220), and food products (150). The alcoholic beverage sector is also experiencing significant growth. As of 2018, the industry employed about 1,100 people up from 270 in 2011.
Tourism, Travel, And Recreation
The tourism industry has been on a gradual growth since the beginning of the millennium, but its future is bleak due to climate change, pollution, overpopulation, and habitat destruction. Yellowstone National Park registered nine years of increase in visitations, but in 2018 it experienced an 11% decline. Glacier National Park is also reporting unprecedented snowmelt and runoff. Nevertheless, the industry employs more than 50,000 people. In 2018, residents and non-residents spent about $6.2 billion in tourism-related expenditure. The more than 12 million residents visiting the state annually have also led to the growth of the transport industry, including an increase in air traffic.
Transport And Logistics
Railroads and long-distance tracking are the most important transport services in Montana. As of 2018, there were about 2,700 employees in long-distance trucking. Yellowstone and Missoula Counties are the major trucking centers and jointly account for nearly half of the total employment. The major issue facing the industry is a shortage of truck drivers. The average age of long-distance drivers in Montana is 49 years. Long working hours, low wages, and casual nature of the job are not appealing to the younger segment of the population. Montana Rail Link and BNSF Railway are the two major railroads.
Real Estate And Construction
The real estate industry continues to exhibit strength year-on-year. Gallatin County reports sale volumes of over 2,500 while Flathead and Yellowstone County record more than 2,000 sales. The five top-selling counties report a median sale price of $270,000. Despite the growth in sales, developers are showing restraint. After the economic recession of 2007-08, investors are wary of flooding the market. House prices are also rising faster than income, and most people prefer purchasing vacated homes rather than newly built.