While the economic news for Yellowstone County is less than stellar, it could be worse and it is not without its bright spots. While 2015 proved to be much better than anticipated - one of the best two years since the Great Recession - the economists' predictions that it would continue into 2016, were off. The economy stalled about mid-year, according to Pat Barkey, director of the Bureau of Business and Economic Research. Exactly, how much it stalled is yet to be seen, because not all the data is in for 2016, but it appears that the decline in oil prices and agriculture commodities slowed the rate of earnings, Barkey told a gathering of a couple hundred Billings business people during the annual Economic Outlook Seminar, on Jan. 31. Barkey predicted that based on non-farm wages, Yellowstone County is projected to grow 2.2 percent in 2017 - which is half the 4.0 percent growth of 2015, but double the 1.5 percent that 2016 is expected to show. Barkey reiterated that which is often stated about Yellowstone County that "as goes the oil patch and agriculture, so goes Yellowstone County." It's true.
Energy and agriculture are among the pillars of Yellowstone County's economy, as is wholesale and retail trade. "Billings is at the middle of huge retail territory," said Barkey. In fact, wholesale and retail trade make up ten percent of the county's economic base. So with agriculture prices down - in some cases below the cost of production - and with oil prices off for almost two years, and given a significant drop in wholesale and retail trade for the region, it should be no surprise that economic indicators - such as earnings and income tax revenues - are impacted. What saves Yellowstone County from an even worse fate is the diversity of its economy. That helps keep a balance when some industries are struggling, others are often doing better. So while the refineries contribute 16 percent to the economy, and health care makes up 14 percent, also having a profound economic impact are construction, manufacturing, tourism, transportation, energy, financial businesses, and government. But while growth is expected to be slow in the short-term, in the long term, "Expect Yellowstone County to expand at a rate that will make it the fastest growing area of the state," said Barkey, in part due to its diversification but also because of population.
Population growth is both "a cause and a consequence" of economic growth, said Barkey. While there has been no official count of the population since 2010, it is estimated that Yellowstone County's population has been growing at an annual rate of 1.6 percent, making it one of the fastest growing counties in Montana, as are several eastern Montana counties. Western counties are also growing but at a slower rate. "Yellowstone County growth trajectory is stronger than the rest of the state," said Barkey. In fact, there is more of an "eastern tilt" to the state's population growth. Only Gallatin County, also growing at an annual rate of 1.6 percent, is a western county in the top 14 counties with the highest population growth of 1.5 percent or more. Fallon County with an annual growth rate of 4.2 percent is the fastest growing county. In terms of economic growth rates Gallatin County is leading the pack, projected to grow 5.8 percent through 2020, while Yellowstone County is projected to grow 2.7 percent during that same period. Missoula is projected to grow 3.2 percent and Flathead 3.3 percent; Cascade 2.1 percent and Lewis and Clark, 1.8 percent, while Silver Bow will grow but 0.4 percent.