Update on Montanas Economy Presented to the Revenue and - - PowerPoint PPT Presentation

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Update on Montanas Economy Presented to the Revenue and - - PowerPoint PPT Presentation

Dec 29, 2022 124 likes •482 views

Update on Montanas Economy Presented to the Revenue and Transportation Barbara Wagner Interim Committee, Chief Economist Helena, Montana MT Dept. of Labor and Industry September 4, 2014 Montanas Unemployment Rate Much Lower than the

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SLIDE 1

Update on Montana’s Economy

Barbara Wagner

Chief Economist MT Dept. of Labor and Industry Presented to the Revenue and Transportation Interim Committee,

Helena, Montana September 4, 2014

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SLIDE 2

1

2 4 6 8 10 12 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Unemployment Rate

Montana’s Unemployment Rate Much Lower than the Nation

Source: Local Area Unemployment Statistics for Montana and Current Population Survey for U.S., Bureau of Labor Statistics and MT Dept of Labor and Industry (MT DLI)

6.2% 4.6%

U.S. Montana

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SLIDE 3

Montana’s Labor Force Above Pre-Recession Peak

94% 95% 96% 97% 98% 99% 100% 101% 102% 103% 2007 2008 2009 2010 2011 2012 2013 2014

Montana and U.S. Labor Force Indexed to 2008 Peak

U.S. Montana

Source: Local Area Unemployment Statistics for Montana and Current Population Survey for U.S., Bureau of Labor Statistics and MT Dept of Labor and Industry (MT DLI)

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SLIDE 4

Montana’s Aging Population

Source: Census and Economic Information Center, MT Dept.

  • f Commerce, April 2013
  • 100,000

200,000 300,000 400,000 500,000 600,000 700,000

2000 2005 2010 2015 2020 2025 2030

Under 20 20 to 64 Over 65

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SLIDE 5

Labor Force Participation Recovering from Recession in Montana

Source: Local Area Unemployment Statistics for Montana and Current Population Survey for U.S., Bureau of Labor Statistics and MT Dept of Labor and Industry (MT DLI)

Montana and U.S. Labor Force Participation Rates Since 1976

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SLIDE 6

U.S. Labor Force Participation by Age Group

Fewer Working in Younger Generations

10 20 30 40 50 60 70 80 90 1950 1952 1954 1956 1958 1960 1962 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 U.S. Labor Force Participation

65 and Older 25 to 29 30 to 34 35 to 44 45 to 54 55 to 64 16 to 19 20 to 24

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SLIDE 7

Take Away Points

  • Montana’s unemployment now at ideal levels.
  • Ideally, rate stays at this level with both job growth and

labor force growth.

– More workers = greater potential GDP – Also need increased productivity and worker training

  • Montana labor force levels are recovering better than

the U.S. from recession change.

  • Aging population and lower participation rates will be an
  • ngoing concern.
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SLIDE 8

Montana Annual Employment Growth Compared to Average, 1993 - 2013

  • 5.0%
  • 4.0%
  • 3.0%
  • 2.0%
  • 1.0%

0.0% 1.0% 2.0% 3.0% 4.0% 5.0%

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Average Annual Growth Past 20 Years for Total Employment = 1% 2013 Growth: Total = 1.7% Payroll = 1.9% Average Annual Growth Past 20 Years Payroll Employment = 1.7%

Payroll Employment Total Employment

Source: Local Area Unemployment Statistics and Current Employment Statistics, Bureau of Labor Statistics and MT DLI.

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SLIDE 9

Employment Growth Slowed in 2013, but Recovered in 2014

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SLIDE 10

2013 Federal Shutdown and Sequester

  • Closure of National Parks
  • 500 Fewer Federal Jobs
  • $8.0 B in 2010 to $5.2 B in 2014
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SLIDE 11

Employment Growth Slowed in 2013, but Recovered in 2014

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SLIDE 12

Claims Data Suggest Improving 2014

Source: Unemployed Claims from Unemployment Insurance Division, MT DLI, unemployed people from Local Area Unemployment Statistics.

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SLIDE 13

Montana and U.S. Personal Income Growth Recovered in First Quarter

  • 4%
  • 3%
  • 2%
  • 1%

0% 1% 2% 3% 4% 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2008 2009 2010 2011 2012 2013 2014

U.S. Montana

Source: Bureau of Economic Analysis

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SLIDE 14

Take Away Points - Employment

  • Job growth in 2012 and 2013 has been above average and

faster than the nation.

– 5th fastest state in the nation for employment growth.

  • Not at pre-recession pace, but should it be?
  • Preliminary employment data suggests record-breaking

employment gains in 2014.

  • Personal income and claims data suggest economy

speeding up from slow end of 2013.

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SLIDE 15

Montana Continues High Rates of Entrepreneurialism

Source: Employer statistics from Business Employment Dynamics, Bureau of Labor Statistics. Percent of Households from Current Population Survey, two-years of data ending May 2014. Analysis by MT DLI.

  • #4 among states for Percent of Households owning a

Business (20%)

  • #12 among states for Net Employer Startups
  • Business started in last five years have added 60,000 net

jobs to the economy

  • Entrepreneurialism likely driven by low wages but high

quality of life

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SLIDE 16

Business Openings and Closings

As a Percent of Establishments

  • Business openings and closing rates have returned to pre-recession levels on

average.

  • Increased seasonality related to construction industry.

Source: Business Employment Dynamics

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SLIDE 17

Share of Montana Employment, Establishments, and Average Wage by Size Class

Source: Quarterly Census of Employment and Wages, MT DLI

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Take Away Points -Entrepreneurialism

  • Montana pretty good at entrepreneurialism.

– Has been important to job recovery.

  • Low wages likely a motivating factor.

– Montana wages are 47th in nation. – Montana per capita income is 36th in nation.

  • We could do better at growing our businesses.
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SLIDE 19

Montana Employment in Recession and Recovery by Industry

Source: Quarterly Census of Employment and Wages, MT DLI.

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SLIDE 20

2013 Unemployment Rates by Region and Reservation

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SLIDE 21

Job Change by Montana Region

Source: Local Area Unemployment Statistics, Bureau of Labor Statistics and the MT

  • Dept. of Labor and Industry. Forecast by the MT Dept. of Labor and Industry.
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SLIDE 22

Job Growth Based on Location of Business Shows Greater Growth in East vs. South Central

  • 6,000
  • 5,000
  • 4,000
  • 3,000
  • 2,000
  • 1,000

1,000 2,000 3,000 4,000 5,000

2007 2008 2009 2010 2011 2012 2013

Northwest Southwest North Central South Central Eastern

Source: Quarterly Census of Employment and Wages

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SLIDE 23

Reservation Employment Change

  • Federal cuts may have caused employment losses in education and health services,

tourism on Blackfeet with the closure of the parks.

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SLIDE 24

Take Away Points – Regions and Industries

  • All industries adding jobs except government.

– Coding change in Business Services hides growth. – Most jobs added in Healthcare.

  • Eastern Montana has posted strong growth for last

few years.

  • Western Montana posted good growth recently.
  • Reservation economies underperforming the state.
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SLIDE 25

Are Recovery Jobs Good Quality Jobs?

Source: Quarterly Census of Employment and Wages, MT DLI.

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SLIDE 26

Average Weekly Hours of Payroll Jobs Recovered from Recession Lows

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SLIDE 27

Average Annual Wage Growth by Sector

  • Montana has had the 5th fastest wage growth among states over last ten years.

Source: QCEW, MT DLI.

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SLIDE 28

Montana Wage Growth, All Payroll Workers

Nominal and Real

Source: QCEW, BLS and MT DLI.

$37,576

  • 1%

0% 1% 2% 3% 4% 5% 6% $- $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 2006 2007 2008 2009 2010 2011 2012 2013

Growth Average Annual Wage

Average Annual Wage Real Wage Wage Growth Inflation

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SLIDE 29

Separations and Hires Rate Still Below Pre-Recession Levels

  • Low separation and hire rates despite good unemployment suggests labor

market frictions. (i.e. skills gap, geographical gap, wages not responding, etc.)

Source: Quarterly Workforce Indicators, U.S. Census LEHD program.

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SLIDE 30

Take Away Points - Job Quality

  • Job quality is of greater concern nationally than Montana.

– Quality and wage growth improves with tighter labor markets.

  • Data suggests Montana adding more full-time jobs.
  • 5th among states for wage growth over last 10 years

– Wage growth in 2013 kept pace with inflation, with losses in the Southwest and North Central. Gains elsewhere.

  • Montana’s average annual wage still low, and 36% of part-

time workers would like full-time work.

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SLIDE 31

Projections for Payroll and Total Employment,

Historic (2001-2013) and Projected (2014-2022)

  • 23,000
  • 18,000
  • 13,000
  • 8,000
  • 3,000

2,000 7,000 12,000 17,000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Total Employment Payroll Employment

1.7% 1.4%

Source: MT DLI Employment Projections

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SLIDE 32

Fastest Growing Industries

  • 1. Health Care – 1,300 per year
  • 2. Trade – 1,000 per year
  • 3. Accommodation and Food – 950 per year
  • 4. Construction – 700 per year

Mining growth continues at slower pace. Slow growing industries include government, information, agriculture, and education.

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SLIDE 33

Montana Jobs by Minimum Education Required, Current and Projected

  • Montana population needs to be more educated to fill job mix in

the future.

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SLIDE 34

MORE INFORMATION AVAILABLE:

WWW.LMI.MT.GOV LABOR DAY REPORT LINK: HTTP://OURFACTSYOURFUTURE.ORG/ADMIN/UPLOADEDPUBLICATIONS/5686_ LDR14.PDF JOB PROJECTIONS REPORT LINK: HTTP://WWW.OURFACTSYOURFUTURE.ORG/ADMIN/UPLOADEDPUBLICATIONS /5621_EMPPROJ.PDF