A new report from University of Montana researchers suggests the state will face a "striking" economic downturn, with the loss of more than 50,000 jobs.
That forecast is contained in a special report prepared and released by the Bureau of Business and Economic Research analyzing how Montana will fare under what researchers call an "unprecedentedly swift and severe decline" in economic activity connected to COVID-19.
The findings include a projection that Montana will "suffer an average employment decline" of 50,000 jobs in 2020, a decline of 7% from the upbeat outlook BBER had released in its annual report to start the year.
"You have to be careful on how you keep score on this stuff because that's 50,000 on average," said U.M. Bureau of Business and Economic Research Director Patrick Barkey. "So the economy was growing the beginning of this year. And we think it will be growing again at the end of this year. And in between, is what we're living through right now, which is just freewill in many parts of the economy."
Most of those losses will impact businesses dealing in accommodations and food, but the researchers say retail and all other sectors will see their share of impacts. That's more than twice the rate of of job decline in Montana during the Great Recession from 2008 to 2010.
"Personal services, accommodations, certainly food, and some retail, things like that," said Barkey. "And clearly that mixes in with the kinds of things that we produce in the economy which are discretionary, and which as I put it, I think they're social distancing challenged."
The report says the loss of those jobs will drive a $3.9 billion hit in personal income for Montanans, also a drop of just over 7%. That's also expected to have a deep impact on tax revenues for local and state government.
"Part of those reasons are simply population and employment," said Barkey. "Northwest loses more jobs because the Northwest has the highest employment total. But it also has to do with job mix, with the Northwest and Southwest having more tourist-related activity, which is expected to bear a heavier blow."
Using their common models based on past state economic reports and national outlooks, the BBER researchers are expecting stronger economic growth in 2021, but say it will be 2022 before much of the recovery is complete.
The bureau also says while Northwest and Western Montana, and Southwest Montana will see most of the impact because of population and the core of those regions' business, "no region of the state" will escape the downturn.
The report concludes by saying the "COVID-19 pandemic has produced a recession that is more severe than anything Montana has experienced" in the decades since World War II.
Click here to view the full report from the Bureau of Business and Economic Research at the University of Montana.
