Montana economy is fairly healthy, economist says

Forget what you've heard and read. Much of Montana, it turns out, is doing pretty well.

"In Montana, we like to think we're one of the poorest places in the world ... well, we're not," Larry Swanson, an economist with the University of Montana, said.

Swanson also is the associate director of the university's Center for the Rocky Mountain West, which on Wednesday sponsored a discussion about Montana's changing economy at the Museum of the Rockies.

Business leaders and city and state officials gathered at the museum to discuss the future of Bozeman's economy in particular, which at the moment is strong, with a concentration of fast-growing business-service industries.

But the city's economy also reflects the change in the state's economy, which, according to Swanson, has transformed from one based on natural resources to one based on human resources -- the "old economy"/"new economy" dichotomy.

Take agriculture. Most farmers and ranchers don't earn enough to cover their operating costs, and the only way they survive is through government assistance and income from second sources.

"Every state is going to solve this problem, and they never have," Swanson noted with sarcasm.

Extractive industries like coal mining and logging have learned to get by with fewer employees, and overall contribute only a small percentage to state incomes.

In Montana, it is the seven largest cities that have been the drivers of economic growth over the past decade, Swanson argued.

In Bozeman, for instance, the fastest-growing industry is business services, which is comprised of small companies that provide services like computer technical assistance and accounting to larger corporations.

That trend pretty much reflects the nation as a whole, a result of an emphasis by large corporations to save money by downsizing and contracting out work they once did themselves.

Other service sectors -- like health care -- also top the list.

In addition, Montanans suffer from the perception that theirs is a rural state, Swanson said. But more than 70 percent of Montanans live within 40 miles of one of the state's seven largest cities, where, at least in cases like Bozeman, the economy is thriving.

That transformation seems to be lost on lawmakers in Helena and the news media, he said.

Swanson doesn't deny that eastern Montana in particular is struggling. In an interview, he suggested state lawmakers need to give individual regions the flexibity to do what they feel needs to be done to stimulate their economies.

Local business leaders had plenty of suggestions about what Bozeman could do during a forum after Swanson's presentation.

They argued government isn't part of the solution, although some panel members said there needs to be an emphasis in preserving what draws people to the city, namely open space.

"Our company is intertwined with our Bozeman location," said K.C. Walsh of Simms Fishing Products, the last manufacturer of waders in the United States.

They also didn't think Bozeman or the surrounding cities should be trying to entice out-of-state companies to set up shop here, but instead focus on building up locally owned business.

Part of the reason was practical: Local businesses don't want to compete with other companies for employees, Andrew Field of PrintingForLess.com of Livingston said.

But he also noted that the area doesn't have the population to support a large manufacturing plant, for instance.

Walt Williams is at wwilliams@dailychronicle.com