Subdivision Growth, SunA1

Over the past six years, Bozeman has been growing at a rate of 1,100 new residents per year. Growth is the primary economic driver of the economy.

As the high tech, university and other sectors expand in Bozeman, University of Montana economists gave a talk Wednesday on the impact of growth on Bozeman’s economy.

The annual seminar took place at The Commons, and speakers from UM’s Bureau of Business and Economic Research discussed everything from agriculture to tourism and recreation. The main focus of this year’s talk was affordable housing.

The root of Montana’s housing issue is growth, economists said. At 2.7 percent in 2017, Montana’s growth in terms of real nonfarm earnings is slower than most other western states, BBER director Patrick Barkey said — Idaho grew 4.3 percent and Washington 5.6 percent, comparatively. That doesn’t mean the state isn’t feeling the challenges that come along with growth, though, especially in areas like Bozeman and the Flathead Valley that are bearing the brunt of it.

In terms of economic development, Bozeman topped many of the economists’ lists, expectedly. Since 2002, the city has seen a dramatic jump in high tech wages, Barkey said. While Montana State University and state government make up the largest portion of its economic base, at 25 percent, trade center — professional industries makes up 16 percent and manufacturing includes 15 percent. Both of those sectors are part of the high tech industry, said Paul Polzin, BBER director emeritus.

Trade center-retail also made up a good portion of Bozeman’s economic base, as new stores open up on the western side of town, at 12 percent. More rural residents are coming to shop in Bozeman, Polzin said, even as retail struggles in other parts of the country.

“Bozeman is evolving as a regular trade center,” he said.

A result of all that growth, however, is finding a place to house new workers, with Gallatin County seeing a positive net migration every year from 1993 to 2016, save 2009 and 2010, during the recession, said Brandon Bridge, BBER economist and director of forecasting.

Meanwhile, data shows that the number of homes sold in the county tapered off in 2016 and 2017. As a result, median housing prices have continued to climb, as evidenced in a report recently released by Gallatin Association of Realtors. In the last year, overall median sale prices in Gallatin County increased by 13.2 percent, GAR reported.

In 2019, Bridge said real estate markets in Montana are expected to remain strong. Affordability will continue to be a challenge, although construction will continue to increase to relieve some pressure, he said. Risk in the markets will continue to grow.

Abby Lynes can be reached at alynes@dailychronicle.com or 406-582-2651. Follow her on Twitter @Abby_Lynes.

Abby Lynes covers business and the economy for the Bozeman Daily Chronicle.

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