Economic and demographic analysis of Montana : information in support of the five-year Montana Consolidated Plan for the plan year beginning April 1, 2002

68 Pages·2001·2.1 MB·English

by  Western Economic Services

363.58
C18EDA
2001
i
ECONOMIC
AND
DEMOGRAPHIC
ANALYSIS
OF
MONTANA
VOLUME
I
M
STATE LIOKARY
6m
P. AVE.
^NTANA 59520
Information in Support of the
Montana Consolidated Plan Year
2002 March 2003
April 31,
1, -
September 2001
UmM^
j.«>NTAMA STATE
MONTANASTATELIBRARY
3 0864 1001 5381 9
Economic and Demographic Analysis
Montana
of
Volume
I
Information in Support of the Five-year IVIontana Consolidated Plan
For Plan Year Beginning
April 1,2002
FINAL REPORT
Prepared by:
Western Economic Services, LLC
212 S.E. 18th Avenue
Portland, Oregon 97214
[phone]
Fax: [phone]
E-mail: [email protected]
September 2001
Montana Department of Commerce
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56
1
TABLE OF CONTENTS
Volume Page
I,
Executive Summary
1
Introduction 7
Section I-Economic Profile ofthe State ofMontana 9
Background 9
Economic Structure 9
LaborForce
1
Personal Income 1
Summary 18
Section II - Montana's Demographic Profile 20
Population 20
Demographic Characteristics 20
Population Living in Group Quarters 24
Native Americans 25
Summary 26
Section III - Housing Inventory and Affordability 27
Housing Units, Household Formation, and Tenure 27
Housing Construction 27
Housing Costs 29
Summary 32
Appendix A - Annual LaborForce Statistics inMontana 33
Appendix B - U.S. Census Bureau New Construction Permits 36
Appendix C - Montana Building Codes Division Permits 45
Appendix D - Montana Building Industry Association Housing Starts 48
Appendix E- 1990 and 2000 Decennial Population Statistics 49
List ofReferences 57
Technical Appendix Volimie 11
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TABLE OF EXHIBITS
Page
Exhibit I: Montana Full and Part-Time Employment 1
Exhibit II: Nonbasic/Basic Multiplier 2
Exhibit ni: Montana and U.S. Average Wages Rates 3
Exhibit rV: Profile ofGeneral Demographic Characteristics 3
Exhibit V: Profile ofGeneral Housing Occupancy Characteristics 4
Exhibit VI: Total Units Permitted by Permit Issuing Areas in Montana 5
Diagram I: Nonbasic/Basic Multiplier 10
Diagram H: Montana Full- and Part-Time Employment 13
Diagram HI: Number ofJobs Held Per Person Working 16
Diagram FV: Montana and U.S. Average Wage Rates 16
Diagram V: Decennial Population in Montana 20
Diagram VI: Total Units Permitted by Penmit Issuing Areas in Montana 28
Diagram VII: Single-family Per Unit Valuation in Montana 32
Figure 1 Population Growth Rate by County 1990 - 2000 22
Figure 2: Population Ranges in Montana Counties 1990 22
Figure 3: Population Ranges in Montana Counties 2000 23
Figure 4: Growth Rates in Selected Cities and Towns, 1990-2000 23
Table 1 Montana Employment by Industry 14
Table 2: Montana LaborForce Statistics 15
Table 3 Real Earnings by Industryin Montana 17
Table 4: Real Personal Income in Montana 18
Table 5: Profile ofGeneral Demographic Characteristics 21
Table 6: Total Population Living in Group Quarters 24
Table 7: Comparison ofMontana's American Indian Population 25
Table 8: Profile ofGeneral Housing Occupancy Characteristics 27
Table 9: Montana Residential New Construction Statistics 29
Table 10: Manufactured Housing inMontana 30
ACCRA
Table 1 1 Housing Cost ofLivingIndex 31
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EXECUTIVE SUMMARY
The purpose of the Economic and Demographic Analysis of Montana is to provide up-to-date
information for Montana's Consohdated Plan (CP) and the State's annual planning process for
housing and community development activities. There are two major goals in preparing this
document. The first is to analyze the economy, evaluate current demographic data, and report on
the current housing market in Montana. The second major goal is to provide useful information
to communities and organizations applying for federal funds from the Home Investment
Partnership (HOME) and Community Development Block Grant (CDBG) programs for projects
involvinghousing, public facilities and economic development.
ECONOMIC PROFILE
Montana's economy is diversifying, becoming less dependent on its traditional resource-based
industries of agriculture, mining, and resource manufacturing. For example, the percentage of
employment in industries such as food products, metals refining, or lumber and wood products is
declining. At the same time, the service and retail sectors are becoming much larger portions of
the State's economic picture. The last 10 to 15 years have seen a steady increase in total
employment, defined as the total number ofjobs. Exhibit I, below, presents the most recent
Bureau ofEconomic Analysis (BEA)job data for the State ofMontana, available through 1999.
Current wage and salary estimates of people working, from the Montana Department of Labor
and Industry, indicate that employment growth has continued through 2000. In fact, nearly 6,250
more people were workmg in 2000 than in 1999.
EXHIBIT
I
600,000 1 MONTANAFULL-AND PART-TIME EMPLOYMENT1969-1999
550.000
CO
g 500,000 -
9 450,000 -
I 400.000 - • • •
< 350.000 -
o
300,000
250,000
69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99
YEAR
So, for more than a decade, the State's economic structure has continued to show signs ofrobust
expansion and strength. However, measuring success only in terms ofjobs can be misleading.
Income is also an important gauge.
The State's economic activities can be separated into two categories: those that bring income into
the State, or "basic" activities, and mcome from those activities that are the result oftrade within
Montana, or "nonbasic" activities. Basic income must continue to flow into the State because
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the nonbasic income eventually "leaks" out of Montana's economy. The ratio of these two
measurements is known as a multiplier. As Montana's economy becomes further developed,
goods and services that were once imported are produced inside the State. This enhances trade
within Montana, and translates into more economic activity per dollar ofbasic income, since a
smaller proportion ofeach dollar is spent out-of-state. The multiplier rises in times ofeconomic
expansion and falls in times of economic decline. Corresponding with rising employment, this
multiplier has increased throughout much ofthe 1990s. However, it is still farbelow the level of
economic activity experienced in the late 1970s.
Exhibit n, below, presents the nonbasic/basic income multiplier since 1969. In the latter 1970s
Montana's economy was exporting significant amounts of raw materials, lumber, and related
heavy industry products. Unfortunately, much of that came under domestic and international
market pressures, leading to a long decline in the health ofthe economy. It was furtherpressured
during the recession in 1981. Some recovery began in 1983, but another recession in 1991
caused ftuther declines. In 1995, the multiplier took a slight downturn, but returned to its
upward course over the last five years. This indicator of economic vitality, the income
multiplier, along with Montana's drive toward greater economic diversification, suggests that the
State's economy is improving and that the business infrastructure is on a long-terra course to
increased economic health.
EXHIBIT
II
1.00 1 NONBASIC/BASIC MULTIPLIER
S 0.95
69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99
YEAR
On the other hand, average earnings per job are not faring as well. Real average earnings for
Montana's workers, as developed fi-om available BEA data through 1999, remain far below the
national average. In 1998, Montana's real average earnings perjob were over $10,000 less than
the national average and in 1999 this gap had expanded to $11,000. This gap in average wage
rates is seen in Exhibit HI, on the following page. This implies that while more economic
transactions are occurring in the State per dollar ofbasic income, these transactions appear to be
dominated by less than average wage, nonbasic sector jobs and Montana's average wages
comparedto the nation continue to deteriorate.
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