Montana feels first overall job loss since 1987

HELENA - For the first time in nearly 16 years, Montana is losing jobs.

A leading economist said Friday that a state Department of Labor and Industry report showing a decline of 300 jobs in the past year may be an omen of worsening economic times ahead for Montana.

''Montanans better brace for themselves, because I wouldn't be surprised if there's more bad news coming down the pike,'' said Paul Polzin, director for the Montana Bureau of Business and Economic Research.

As gloomy as the latest report is, he noted it does not include the elimination of 467 jobs from closure of the Louisiana-Pacific sawmill in Belgrade this week and the planned August shutdown of Stream International, a technical support company in Kalispell.

He said the job losses reported Friday were a surprise.

''I thought we would get by with just slightly slower growth, but now we've had enough negative events that have happened that this is probably not a one-month thing,'' Polzin said. ''It's a medium-sized shock.''

Montana's decrease in jobs - the first since October 1987 - means the state has joined the rest of the country in the slowdown that's been under way for almost two years.

Nationally, jobs have been decreasing since July 2001, but Montana had managed until now to maintain at least modest growth.

''We had been doing quite well at avoiding the recession impacts and the national recession,'' Polzin said. ''The economy was showing pretty strong growth late last year.''

In fact, jobs increased at the annual rate of about 2 percent during the last quarter of 2002. That slowed markedly to just half of 1 percent during the first five months of this year.

Particularly troubling in the latest labor report is construction businesses, which show no increase in jobs from last June. Polzin noted that consistent job growth in the industry for years made it a mainstay of Montana's economic well-being.

But other sectors also are off. Natural resource and mining companies have 200 fewer jobs, manufacturing is down 1,000 and even the dependable retail trade has dropped 300 jobs.

Polzin said the fallout from a decrease in jobs will include rising unemployment, increased social stress and falling tax collections for a state government that had to cope with a $230 million deficit this year.

The big question is whether the downturn in jobs is the start of a long-term trend in Montana, he said.

''What is the resiliency of the Montana economy? After bad news for a couple more months, are we going to bounce back or is this the beginning of really tough times?'' Polzin said.

Phil Brooks, an economist with the Labor Department, said the last extended period of job losses occurred in the early 1980s, triggered by drought, collapse of the oil and gas industry and national recession. The economy turned around due to surges in manufacturing, metal mining, construction and federal government employment, he said.

A bright note in Friday's labor report was Montanans' wages. Average weekly earnings grew by 5 percent over the year, more than twice the increase in the cost of living during that time.

The June unemployment rate declined slightly from 4.4 percent in the same month last year to 4.3 percent, but only due to growth in the labor force. The number of jobless climbed slightly from 20,600 to 21,000.

The highest county unemployment rates were in Big Horn, 15.6 percent; Lincoln, 14.7 percent; Glacier, 12.2 percent; Roosevelt, 8.4 percent; and Mineral, 7.5 percent.

The lowest June jobless rates were Powder River, 1.3 percent; Daniels and Garfield, 1.6 percent; Prairie, 1.7 percent; and Fallon, 1.9 percent.

Among the most-populous counties, Lake had the highest unemployment rate at 6.4 percent, followed by Flathead, 5.5 percent; Cascade, Hill and Ravalli, 4.5 percent; Lewis and Clark, 3.8 percent; Park, 3.5 percent; Yellowstone, 3.4 percent; Missoula, 3.3 percent; and Gallatin, 2.4 percent.