Slow economic growth forecasted for county in 2015

The Flathead Valley can expect to see a year of slow economic growth in 2015, according to forecasts presented at Montana West Economic Development’s annual economic forecast on Jan. 28 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.”

A number of factors could impact the area’s economy, including higher interest rates, higher oil prices and the falling Canadian dollar impacting tourism and real estate, Eldridge said. Tourism in the Flathead 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 said — tourism brings outside dollars into the economy, which supports higher wage jobs.

The falling Canadian dollar not only could create a decline in the number of people crossing the border, it 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 remains down from its 2007 peak but has been growing since 2011.

The wood products industry is strong, with employment up slightly last year. But the wood products industry is “double sensitive” to outside factors, he said, 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 fiscal year 2013 to fiscal year 2014, the local employment rate increased 1.6 percent, with 604 jobs added to Flathead County. Eldridge predicts 1.6 percent employment growth again 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, presented a look at real estate trends in the Flathead. In 2014, the county saw its highest number of residential sales since 2006, and the median sale price was 3 percent higher than in 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 sales in Whitefish dipped below 2013 levels. Bennett pointed out that the median price for homes in Whitefish is 54 percent higher than in 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 cities. 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, and Columbia Falls saw an increase from eight to 21.