Economic Outlook Seminar Held in Sidney March 14

The 2023 Montana Economic Outlook Seminar was held in Sidney at the Richland County MSU Extension Office on Tuesday, March 14.

It was presented by Patrick Barkey, University of Montana Bureau of Business and Economic Research director. The theme was about the recent in-migration of citizens moving into Montana.

"Demand for Montana has surged since the pandemic (and since the TV show "Yellowstone"). At historical prices, more people want to live/spend time in Montana, partly because of the pop-culture effects from the TV series "Yellowstone" starring Kevin Costner.

How demand increases change Montana depends on whether/how Montanans choose to increase supply," said Barkey. He explained that if Montana chooses to expand supply, Montana will have more people. Montana will enjoy the benefits/suffer the consequences of size (e.g. more people leads to more opportunities but also increases congestion/scarcity, particularly for things where it is hard/impossible to increase supply). If Montana limits supply growth, Montana will become expensive. The number of people will stay the same, and Montana will suffer more of the consequences of cost (e.g. the types of economic opportunity available and the set of people who can live in/visit Montana will change to favor those who can afford it). While these changes are not new (Montana has dealt with them for decades), more demand means more tradeoffs. Navigating these tradeoffs will be the defining feature of Montana's future.

"Montana's net migration rate from July 1, 2020-July 1, 2022 was 3.3 times higher than the 2000-2019 average," explained Barkey. Different people moved to Montana. The share with a college degree increased. The share of in-migrants working from home increased by 12%. Montana's net migration rate since the pandemic ranks in the 98th percentile (or 21st) among 1,173 2-year-state periods since 1999, roughly comparable to Florida during 2016-2017, North Dakota during 2013-2014, and Arizona 2003-2004. Montana's 32% increase in inflation-adjusted home values between 2019-2022 ranks in the 96th percentile of all states 3-year growth rates since 1999. Montana's inflation-adjusted home values increased by 11% more than U.S. inflation-adjust home values over this period. These ranks 88th percentile of all state-3-year periods.

"An average, or medium home in Bozeman right now is selling for $950,000, said Barkey. Effects are not uniform across the state. Glacier, SW, Yellowstone, plus Billings experienced strong net migration for decades. Montana has been through booms and busts before; however, variance in population change shrank during the past 20 years (as average increased).

The Montana Ag situation and outlook was also discussed. "Output prices look good, but as always the story is complicated," explained Barkey. The war in Russia has had some impact on our ag economy. Beef exports were strong in 2022. The Montana drought is better, but not good. Nationally, drought has become less intense but more widespread.

Barkey also discussed the recession. "Will Montana avoid the recession? Predictions are hard to make, but maybe there won't be a recession? Perhaps in-migration will soften a downturn. We know inflation and interest rates won't avoid Montana. Weakening consumer spending and slowing global growth will be felt here".


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