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Montana's economy continues to recover.

Montana's Economy Continues to Recover

These forecasts are part of Economics Montana, a program cosponsored by the University of Montana Bureau of Business and Economic Research and U S WEST

Montana's fragile economic recovery will continue for the next several years, according to Paul E. Polzin, director of the Bureau of Business and Economic Research. He made that projection as part of the Economics Montana forecasting program, cosponsored by the bureau and U S WEST. To make its forecast for Montana, the bureau uses national and state statistics compiled from various sources.

"The data show that economic growth has been sporadic and irregular since early 1988, but it was growth nevertheless," Polzin says. "This is good news for Montana because there were declines in five of the previous seven years."

Montana's economic growth will be modest, lagging behind the rest of the nation. The state's overall economic activity, as measured by nonfarm labor income, will rise about 1.0 percent in 1990, Polzin projects, while the U.S. economy will grow about 2.3 percent.

Polzin attributes the modest increases to several causes. First, he says, there has been a dramatic expansion in the metal mining industry. Employment in metal mining increased by 700 workers--or more than 40 percent--between 1987 and 1989, he says.

Montana's health care industry has expanded, too. Polzin speculates that this growth is occurring because the nation's population is aging and requires more medical services. Third-party payment plans such as health insurance and Medicare also contribute to the industry's growth, he says.

Looking further into the future, Polzin says that Montana's economy will continue to lag behind the nation in terms of economic growth. From 1990 to 1992, Montana will grow at an average of 1.9 percent per year, compared to 3.0 percent for the nation, he says.

Personal income, one of the major determinants of retail sales, will increase about 0.8 percent in 1990 and about 1.8 percent per year from 1990 to 1992, Polzin says, adding that these growth rates will also be less than the national averages.

Montana's job market will also improve slightly. Nonfarm wage and salary jobs will increase about 3,200 per year between 1989 and 1992.
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Publication:Montana Business Quarterly
Date:Jun 22, 1990
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