CHANGING TIMES CHANGING VALUES

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Montanas Regionally Diverse Economy   By Dr.
Larry Swanson, OConnor Center for the Rocky
Mountain West, U. of MT   While Montanans often
speak of the states economy, in reality, there
is no such thing as a Montana economy. Montana
is a large state with widely varying terrain, a
widely dispersed population and many different
area economies. These differences cut along
lines east and west, as well as urban and
rural. While Montana is sometimes thought of
as being two states, one East and one West,
it can more accurately be seen as three somewhat
distinct regions   -         - Western
Mountain region - areas of the state west of the
eastern front of the Rocky Mountains
(21 cos.)   -         - Eastern Plains region -
areas of the state east of the Rockies extending
from the far- flung Plains (21
cos.)   -         - Central Front region -
transition area where the Plains meet the Rocky
Mountains (14 cos.)   These three
general regions can be defined by geography and
terrain, but differences extend into climate,
population density, and underlying economies.
Vast differences also are evident in comparing
largely urban areas in Montana with largely
rural ones. Few Montanans think of the state
as urban, but much of the states recent
economic growth is urban in character, while much
of the states ongoing economic contraction or
decline is centered in largely rural areas.
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Patterns of Net Migration in Montana   During the
decade of the 1980s, 53,000 more people moved
from Montana than the number moving to Montana,
changing their permanent residence in the
process. However, this pattern of out migration
dramatically reversed itself during the decade of
the 1990s with nearly 51,000 more people moving
to the state than away between 1990 and 1999.
  While this migration shift is a dramatic
reversal, not all areas of Montana are sharing
evenly in this net migration. The chart on the
upper right shows how net migration statewide
during the last two decades is allocated by the
three general regions. During the 80s all three
regions experienced net out-migration. However,
most population loss resulting from this was in
Montanas Central Front, with net out-migration
of 24,847. and Eastern Plains, with net
out-migration of 23,072. Out-migration from the
West was relatively small at just over
5,000.   In the 90s when the direction of net
migration reversed, the Western Mountains saw
most of the gain with net in-migration of 57,493.
The chart below shows net migration during the
1990s by county, with individual counties in the
West at the left and counties in the East at the
right. The three counties with the highest net
in-migration are Flathead (10,920), Ravalli
(10,377), and Gallatin (9,534), all in the West.
Yellowstone County had the 4th highest net
in-migration (7,850), followed by Missoula
(6,208), Lewis and Clark (4,308), and Lake
(4,158). The county with the single highest net
out-migration is Cascade (-5,411). Virtually all
of the counties in the Eastern Plains region
continue to see net out-migration.
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Montanas Lop-sided Population
Growth   Montanas population grew by only
12,375 people in the 1980s. However, fueled by
shifts in population migration, Montanas
population grew by 103,000 people during the
1990s, an eightfold increase in population
growth over the previous decade. About 85 of
this population growth resulted from net
in-migration, which was concentrated in the
states Western Mountain region. The chart at
the right shows population growth during the 90s
by individual county from west to east in
Montana. Montanas fastest-growing counties are
Ravalli (44 growth), Gallatin (34), Broadwater
(32), Jefferson (27), Lake (26), Flathead
(25), Stillwater (25), and Missoula (22) the
only counties with gains of over 20 and counties
all located in the Western Mountain region.
  Population growth in Montana declines almost
systematically in going from west to east, with
all but two of the 21 Eastern Plains counties
losing population. The county with the single
greatest percentage loss in population is
Garfield County (-20).   The chart in the lower
right shows total population change by major
region for the last two decades. Population
growth in the Western Mountains surged from
23,303 in the 1980s to over 88,000 in the 1990s.
Significant growth also returned in the Central
Front region. However, population decline
continues in the Eastern Plains, although at a
lower level. In all likelihood, a similar
pattern of regional population change will
continue in Montana, at least for the next ten to
fifteen years.
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Regional Differences in Income and Employment
Growth  Just as population growth is
concentrating in the states Western Mountain
region, so is income and employment growth. The
chart in the upper right shows gains in total
personal income during the last two decades by
major region of Montana. In the last decade
total personal income in statewide grew by
almost 4 billion and about 73 percent in the
income growth occurred in the Western Mountain
region where personal income grew by almost 2.9
billion. This rise in total personal income in
the West represented a 250 percent increase over
the gain of the previous decade. So, income
growth in the Western Mountain region has greatly
accelerated, following a similar pattern in
population growth.   Personal income grew by 974
million in the Central Front region, an increase
of 270 percent over the previous decade. The 21
counties in Montanas Eastern Plains region
accounted for only 2.5 percent of all income
growth in the last decade.   During the 1990s,
total employment in Montana grew by over 126,000
jobs, including both full and part-time
employment. Seventy-three percent of this job
growth occurred in the Western Mountain region.
Another 24 percent of the growth occurred in the
Central Front.   Quite clearly, all major
measures of economic growth and expansion
indicate that this growth is occurring
overwhelmingly in the Western Mountain region.
It is highly likely that income and employment
growth are following in the footsteps of
population expansion in the West, which is
resulting from changes in the larger pattern of
migration.    
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The Rocky Mountain West is one of the Nations
fastest growing regions The map below shows
multi-state regions of the West, dividing the 22
contiguous western states into 7 general regions.
The charts at the right show various measures of
economic growth for these regions during the
90s. By all three measures, the Rocky Mountain
West can be seen as one of the nations
fastest-growing regions with one of the fastest
growing regional economies. The Rockies also had
one of the highest percentage increases in per
capita income up 23 in inflation-adjusted
dollars.  
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Recent Employment Change in the Fast-growing
Rockies and in Montana  In the last decade when
the economy of the Rocky Mountain West became one
of the fastest-growing regional economies in the
nation, employment growth in the broad services
sector accounted for 37 percent of all new jobs
in the region. The top chart shows employment
change in the five-state region by major sector
over the course of the last twenty years. There
are 13 major sectors of the economy and two of
these, services and retail trade, now account for
nearly half of all employment. The sector with
the third highest employment is Finance,
Insurance, and Real Estate, or the F.I.R.E.
sector, which is followed by manufacturing,
construction, and local government (which
includes public education).   There is a common
perception in Montana that the states economy is
deteriorating, with many citing the growth in
service and retail trade jobs and the loss of
other good jobs in the economy. In actuality,
the changing mix of jobs in Montana closely
parallels the changing mix of jobs in the larger
Rocky Mountain West region which has seen
significant gains in economic performance in
recent years. In the last decade while service
jobs grew by 37 percent in the fast-growing
Rockies, they grew by 42 percent in Montana.
And, while services and retail trade now account
for nearly half of all jobs in the Rockies, they
accounted for 49 percent of jobs in Montana in
2000.   When you compare employment trends in
Montana with the larger Rocky Mountain region,
there are differences. F.I.R.E. is also the
fourth highest major sector of employment rather
than third as in the Rockies. Manufacturing is
seventh, rather than fourth. And farm and ranch
employment is sixth in Montana rather than
twelfth.
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Region Economic Restructuring Greatest Growth
and Greatest Decline
SUB-SECTOR CHANGE IN ROCKIES, 87
97   Fast-Growing Sub-Sectors (2000 dollars) 1
Business services 5.8 bil. 130 2
F.I.R.E., other than depos. 4.5 bil. 108 3
Health care services 4.4 bil. 64 4
Special trade contractors 3.4 bil. 88 5
Communications 2.8 bil. 103 6
Engineering managmt serv. 2.6 bil. 78 7
Eating drinking places 1.4 bil. 57 8
Electric, gas sanitary serv. 1.0 bil.
60 9 Auto dealers serv. Stat. 1.0 bi.
51 27.0 (53) Declining Sub-Sectors Oil
gas expl. extract. - 38 mil. - 2 Coal
Mining - 116 mil. - 13 Railroads - 136
mil. - 13 Net farm income - 216 mil. -
10 Transpt. Equ. mfg., not autos - 439
mil. - 25 U.S. Military - 570 mil. - 17
There are more than 70 different sub-sectors of
the economy and the ways in which the economy is
restructuring can be viewed by identifying
where the biggest gains and biggest losses
are occurring.   In the fast-growing Rocky
Mountain West region, labor income growth has
been focused in business services (including
such areas as accounting, advertising, computer,
management services, etc.), F.I.R.E.
non-depositories (insurance, real estate,
brokers, etc.), health care services (doctors and
hospitals), special trade contractors
(carpenters, plumbers, electricians, etc.),
communications (telephone, radio and television,
etc.), and engineering and management services
all with gains in excess of 2 billion.
  Declines were focused in U.S. military,
transportation equipment manufacturing other than
autos, agriculture, railroads, and mining.
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Area Economic Restructuring Greatest Growth and
Greatest Decline
SUB-SECTOR CHANGE IN MONTANA, 87
97   Fast-Growing Sub-Sectors (2000 dollars) 1
Health care services 408 mil. 49 2
F.I.R.E., other than depos. 223 mil. 96 3
Special trade contractors 197 mil. 67 4
Business services 177 mil. 85 5
Engineering mgnt serv. 127 mil. 69 6
Eating drinking places 106 mil. 41 7
Auto dealers/service stations 91 mil.
44 8 Social services 90 mil. 117 9
General building contractors 78 mil.
54 1.5 bil. (64)   Declining Sub-Sectors
U.S. Military - 14 mil. - 6 Coal
mining - 18 mil. - 20 Trucking
warehousing - 21 mil. - 7 Railroads -
28 mil. - 13 Lumber wood prod. Mfg - 48
mil. - 15 Net farm income - 173 mil. -
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There are more than 70 different sub-sectors of
the economy and the way in which the economy is
restructuring can be viewed by identifying
where the biggest gains and biggest losses
are occurring.   In Montana, the five
fastest-growing sub-sectors of the economy during
the period from the late 80s to the late 90s
are health care services, F.I.R.E.
non-depositories, special trade contractors,
business services, and engineering and management
services all with gains of over 100 million in
labor earnings.   Declining sub-sectors in
Montana include production agriculture, lumber
and wood products. railroads, trucking and
warehousing, coal mining, and the U.S. military.
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Major Population Centers or Region Cores and
Closely-Linked Counties in the West
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Urban/Rural Features of Population Growth in
Montana   While most Montanans dont think of
the state as being urban, most of the states
population lives in or nearby one of the states
seven principal population centers. Montana has
seven major population centers including Billings
(Yellowstone), Missoula (Missoula), Great Falls
(Cascade), Helena (Lewis and Clark), Butte
(Silver Bow), Bozeman (Gallatin), and
Kalispell/Whitefish (Flathead). While small by
national standards, most of these cities and the
city regions surrounding them are growing. As
they do, theyre achieving market area population
thresholds necessary for sustained growth and
economic diversification.   The chart at the
right shows population growth among Montanas
city regions. The multi-county areas included in
each, shown in the previous map, include the
areas regional center or core county and
surrounding counties closely-linked to these
regional centers. Twenty-eight of Montanas 56
counties are closely-linked to one of the states
seven regional centers. The remaining 21
counties are more isolated and rural areas,
largely in the north central and eastern half of
the state.   The lower chart shows population
growth in Montana since 1980 by county type
regional centers, closely-linked, and rest of
state. Recent population growth is focused in
regional centers and their surrounding areas.
The greatest growth is in the Billings, Missoula,
Kalispell, Bozeman, and Helena regions. Growth
is flat in the Great Falls region, heavily
dependent upon agriculture and the Malmstrom Air
Base. The Butte region, historical center of
Montanas mining industry, also is flat. Much of
the rest of Montana the more isolated, more
rural, and more agriculturally dependent portions
of the state, largely in the East is
experiencing steady population decline.
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Urban/Rural Features of Income and Employment
Growth in Montana   Just as population growth in
Montana is increasingly focusing in the states
largest cities and their surrounding areas, so is
overall growth in income and employment. As
shown in the chart at the right, personal income
in the states seven regional center counties,
which grew by over 1 billion in the 80s, grew
by more than 3 billion in the 90s, a threefold
increase in growth. Personal income in counties
closely-linked to these regional centers, which
grew by 450 million in the 80s, grew by nearly
745 million in the 90s. Together, the regional
centers and their closely-linked areas accounted
for over 96 percent of all income growth in the
state in the last decade. With concentrated
growth in these city regions, Montanas more
urban areas now account for 87 percent of
statewide personal income and this concentration
will continue to grow in the future.   Statewide
employment also is concentrating in the states
city regions. During the last decade, total
employment both full and part-time employment
of all types grew by over 92,000 jobs in the
seven regional centers, by over 28,000 jobs in
closely-linked counties, and by only 5,700 jobs
in the rest of the state. As with population
growth and personal income growth, employment
growth has been greatest in the Billings and
Missoula regions. Employment also is sharply
rising in the Bozeman and Kalispell regions, and
to a lesser degree, in the Helena region. Total
employment is growing at a much more modest rate
in the Great Falls and Butte regions, the states
two city regions with very flat population growth.
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Long-term Consolidation and Decline in the
Regions Natural Resource Industries   For much
of the states history, Montana has depended on
three pillars of the economy - agriculture,
mining, and wood products. The chart at the
right shows inflation-adjusted labor earnings for
each of Montanas natural resource industries
since 1980. Included in the chart are farm and
ranch production (net farm income), wood
products manufacturing, and three sub-sectors of
mining (metals and non-metal/non-fuels, oil and
gas, and coal mining). Year-by-year earnings in
agriculture have been erratic. Wood products
earnings are flat or declining, as is the case
with metals and non-metals mining and oil and
gas. And while more coal is mined in Montana
almost each year, it is usually done with fewer
workers and labor earnings by these workers are
flat or declining.   In spite of this decline
or stagnation in the states natural resource
industries, the larger economy of the state has
continued to grow. The chart in the lower right
shows total personal income and statewide labor
earnings in relation to the combined labor
earnings of all natural resource industries for
each year since 1980. Whats more, growth in
income and labor earnings has accelerated over
the course of the last decade. The states
resource industries continue to be important to
Montanas overall economic prosperity. However,
the states narrow dependence on these
industries is declining and future growth will
largely occur in other segments of the economy.
However, some areas of Montana, particularly
isolated rural areas in the East, will continue
to be narrowly dependent on one or more of these
industries.
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Montanas Natural Resource Industry
Dependence While the states resource industries
are very important components of the economy,
Montanas economic dependence on these industries
is steadily declining. This reflects both
long-term decline in these industries and
expansion and diversification of the economy in
other sectors.
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Montanas Struggling Farm and Ranch Sector In
Montana as in most other agricultural regions of
the U.S., production agriculture has been
struggling. Total cash receipts from
agricultural sales on a year-to-year basis
regularly fall below total production expenses
and the difference in net gains or losses is
determined by income of agricultural producers
from other sources including government farm
programs.
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Regional Distribution of the Fast-growing
Services Sector   With service sector growth
dominating all other sectors in employment growth
in Montana and the larger region, it alone is
having a major impact on the distribution of the
larger economy of the state. The chart at the
right shows major sub-sectors of the services
sector and their labor earnings growth since the
last 80s. Health care services are the single
largest component and dwarf all other service
sub-sectors. Far behind in second place within
this sector is business services, followed by
engineering and management services.   There is
little doubt that growth in these areas would
favor urban areas and city-region size population
and market areas.   The lower chart shows the
distribution and growth of service sector labor
earnings for the states regional center
counties, counties closely-linked to these urban
areas, and the rest of the state. Service sector
activity has been steadily expanding in the
regional centers, doubling in size between 1980
and the mid-1990s and continuing to grow.
Services activity in counties closely-linked to
these regional centers grew beyond activity in
the rest of the state in 1989. This gap has
steadily widened since then. Together, the seven
regional centers and their closely-linked
counties accounted for 95 percent of all service
sector growth in Montana during the last
decade.   To the degree that economic expansion
in Montana continues to be focused in services
and other trade sectors, such growth will
continue to concentrate more and more of the
states overall economy in and around these
regional centers.

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Montana Counties Rank-Ordered by Per Capita
Income The chart shows how per capita income in
2003 varied across Montana from the county with
the highest p.c.i. Yellowstone at 27,390 (2000
dollars) to the county with the lowest p.c.i.
Petroleum at 15,160.   Of the 13 counties with
per capita incomes greater than 24,000, seven
are regional center counties or counties in
Montana where one of the states seven major
population centers is located.   Of the 16
counties with per capita incomes less than
19,000, five are reservation counties (Big Horn,
Blaine, Glacier, Roosevelt, and Lake).
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Lessons to Learn from Emerging Economic
Patterns   Look Forward Promising strategies
for economic improvement must reflect where the
economy is going, not where it has
been.   Customize Strategies Needs and
opportunities vary widely from place to place.
Goals and strategies must likewise vary.   Cities
Matter Recognizing that most growth is focusing
in and around city regions, more attention
needs to be focused on the needs of cities as the
settings if not the engines of economic
growth, diversification, and advancement. In
Montana, we need to assist cities, not deny that
we have any.   Urban-Rural Relations Matter
Pursuing economic development town-by-town or
county-by-county is difficult. Influencing local
economies sub-region by sub-region with healthy
urban-rural partnerships has potential.   Become
Learning Communities Successful businesses
are adaptive businesses. Successful communities
are adaptive communities. Adaptive communities
must be learning communities, keeping abreast
of change.   Think about Regional Positioning
Local economies cant be remade by local leaders.
What they can do is find ways of better
positioning themselves businesses, schools,
work forces, governments, families for future
change. Anticipate future change and position
yourself for it.   Human-Resource Based Economy
The economy is less and less natural resource
based, and more and more human resource based.
Do we know how to invest in human resource
development? Well-designed, well-funded,
adaptive systems for education and work force
development are essential for economic
prosperity.   Environment as a Key Economic
Asset In the new economy, a quality
environment is a key economic asset. Protecting
and enhancing environmental qualities is not the
enemy of economic development. It is essential
for economic prosperity.
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Total Tax Revenues in Montana In actual dollars
or dollars unadjusted for inflation, state and
local tax revenues from all sources have steadily
risen over time, as shown in the top chart. This
rise is much less pronounced when these dollar
amounts are adjusted for inflation, as shown in
the lower chart. Source 1998 2000
Biennial Report, Montana Dept. of Revenue
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Montana Tax Revenues as a Share of Income
Actual tax collections as a share of total
personal income reflect the size of the states
tax burden in relation to the size of Montanas
economy.
Tax revenues as a share of income Have steadily
fallen from as high as 10.24 in 1985 to a low of
7.78 in 2002. State revenues are not growing as
fast as are incomes.
Source 2000-2002 Biennial Report, MT Department
of Revenue
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Regional Trade and Service Areas of Montanas
Largest Cities
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Regional Trade and Service Areas of Montanas
Largest Cities
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The Flatheads Changing Economy
By Dr. Larry Swanson OConnor Center for the
Rocky Mountain West University of Montana
Flathead Countys population largely resides in
or nearby the communities of Kalispell,
Whitefish, Columbia Falls and Big Fork. Over half
of Glacier National Park falls within Flathead
County and West Glacier is the parks principal
gateway. Adjacent to Glacier Park is Waterton
Lakes National Park in Canada to the north and
the Blackfeet Indian Reservation to the east. The
larger area contains many other types of public
lands, including national forests and wilderness
areas. Beautiful Flathead Lake occupies the
countys southern edge. The lands and natural
features, anchored by Glacier Park, are defining
features of the Flathead Valley and are defining
factors in the emerging Flathead area economy.
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Recent Population Growth in Flathead
County   Flatheads population grew from 45,000
people in the mid-1970s to nearly 75,000 today.
However, population growth sharply accelerated
during the last decade, spurred by increasing net
migration. Over 80 of the countys total
population growth in the last decade resulted
from more people moving to the area than the
number moving away. The countys population will
likely grow to between 87,000 and 99,000 by 2010.

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The Flathead Population in 1990 versus 2000 by
Single Ages
The chart below shows where population growth in
the Flathead has been the greatest over the last
decade. Population growth is focused among
adults at ages between their early or mid-40s to
mid-60s. Among the younger population, growth is
focused among the high-school age population, or
persons between 12 and 18.

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The Missoula Co. Pop. in 1990 versus 2000 by
Single Ages
The chart shows population change in Missoula
County by single age for 1990 versus 2000.
Population growth is concentrated among adults at
ages between their early 40s and early 60s, as
well as among older children. Growth among
persons in the early 20s primarily reflects
University of Montana enrollment growth.
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The Ravalli Co. Population in 1990 versus 2000 by
Single Age
The chart shows population change in fast-growing
Ravalli County over the last decade by single
ages. Population growth is clearly focused among
adults at ages between their early 40s and early
60s (baby boomers). Growth also is high among
older children.
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Lewis Clark Population in 1990 versus 2000 by
Single Age
The chart shows the countys total population by
single age ten years apart. Population growth is
concentrated among persons at ages between their
early 40s and early 60s (baby boomers), as well
as among younger adults and children in their
teens and early 20s.
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Changing Age and Income Features of Flathead
County
Recent shifts in migration patterns in the West
are heavily associated with four major forces in
change 1) the U.S. population is becoming older
and an older population is more prone to migrate,
2) personal income from non-labor sources is
expanding, making more of the nations income
base transportable, and 3) dramatic
improvements in information technology and
communications infrastructure are redefining the
workplace, making it more flexible and 4) U.S.
job growth is concentrated among small firms and
businesses, which have greater latitude in
location. These forces are playing out in growth
in the Flathead. Over the course of the last 20
years, the population of Flathead County has
aged, with the median age increasing from 30 in
1980 to 35 in 1990 and to 39 in 2000. This aging
is consistent with population aging nationwide,
however, areas of the West with high rates of net
in-migration tend to be adding significantly to
their 40-to-65 year old populations.   As the
population of the Flathead has grown and aged,
income composition has changed. Income from
non-labor sources like investment income and
transfer payments is growing more rapidly than
income from the workplace.

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Recent Employment Trends in the Fast-growing
Flathead Economy
  Employment change in Flathead County over the
last 20 years largely reflects the pattern of
employment change in the larger Rocky Mountain
West and nation as a whole. Employment growth is
heavily concentrated in services including
health care, business services, engineering and
management, social services, etc. and in retail
trade. These two sectors alone, which accounted
for nearly 50 of all employment in the
fast-growing Rocky Mountain West, now account for
just over 50 of all employment in Flathead
County. During the 90s, these two sectors
accounted for over 60 of all job growth in the
Flathead.   Employment growth also is occurring
in Construction, Manufacturing, and Finance,
Insurance, and Real Estate (F.I.R.E.).   Labor
earnings by sector are shown below. Labor
earnings by those employed in some aspect of
services first surpassed manufacturing labor
earnings in 1990. Earnings in retail trade and
construction still trail those in manufacturing.

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Major Areas of Growth in Flathead Countys
Services Sector
Employment in services in Flathead County
accounted for 61 million in labor earnings in
1975 out of a total of 470 million in total
labor income only 13 of the total. Today,
services employment accounts for nearly 295
million in labor earnings in the county, nearly
30 of all labor earnings by area residents.
  The three sub-sectors within services with the
largest labor earnings are health care services,
business services which include establishments
primarily providing services to other businesses,
including computer services, advertising,
accounting, management, etc. and engineering
and management services. The core employees of
these types of services are doctors, nurses, and
other health care professionals, business
professionals including accountants and computer
specialists, engineers and management
specialists, and a wide array of support staff
for these professionals.   Health care services
are the single largest category of services in
the Flathead by far, with labor earnings in
excess of 115 million. Far behind, but
nevertheless significant and growing, are
business services at over 50 million and
engineering and management services at just under
25 million.

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Fundamental Trends in the Direction of Economic
Change in Flathead County
The Flathead area economy is undergoing
fundamental shifts and restructuring.
Longstanding industries, like lumber and wood
products manufacturing, primary metals
manufacturing, railroads, and agriculture, are
declining or only slowly growing. Meanwhile,
sectors spurred by population growth and income
expansion are where growth is focused. Growth
also is occurring in sectors benefiting from area
travel and tourism activity.

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Agriculture Income and Expenditures in the
Flathead
Agricultural producers throughout the U.S. have
been in difficult economic straits for much of
the last twenty years. The same in true for many
agricultural producers in Flathead County.
  The chart at the right shows gross
agricultural marketing receipts by Flathead
County farmers and ranchers over the last 20
years in relation to total annual production
expenses. Income received by ag producers from
sources other than their own sales, which
includes some non-cash income that is imputed or
estimated and government payments under federal
farm programs, also is shown.   From one year to
the next, expenditures usually exceed marketing
receipts by a considerable margin and ag
producers in the area essentially rely on imputed
income and government payments to stay in
operation. This is a tenuous situation for the
areas agricultural sector.

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Longstanding Industries in the Flathead Area
Economy   Logging and wood products
manufacturing, railroads, agriculture, and mining
have all played important roles in the Flathead
area economy over time. However, these
industries are in the midst of industry
consolidation or decline and, as such, are
becoming smaller components of the areas overall
economy.   The chart in the upper right shows
levels of labor earnings for segments of these
industries over the last 20 years. And the lower
chart then shows labor earnings for these
industries as a whole as a percent of all labor
earnings in the valley and as a percent of all
personal income. These industries share of all
labor earnings has fallen from 11.4 in the
mid-70s and 10.95 in the early 80s to 6.8 more
recently. Over the same period their share of
total personal income has fallen from 9 to less
than 5.
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Rapidly Growing and Declining Sub-Sectors In
Flathead County
The Flathead economy is undergoing significant
restructuring and change with growth focused in
many service, trade and construction sub-sectors
and decline concentrated in traditional
industries including primary metals
manufacturing, wood products, railroads and
agriculture.
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Rapidly Growing and Declining Sub-Sectors In
Missoula County
The Missoula economy is undergoing constant
restructuring and change with growth focused in
many service, trade, financial, and construction
sub-sectors and decline concentrated in
traditional industries like lumber and wood
products manufacturing, other manufacturing, and
agriculture. Many of these fast-growing
sub-sectors can only grow and thrive in largely
urban-based economies.
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Rapidly Growing and Declining Sub-Sectors In
Lewis Clark County
The Helena area economy is undergoing significant
restructuring and change with growth focused in
many service, trade, financial and construction
sub-sectors and decline concentrated in
traditional industries including metal mining,
agriculture and wood products, as well as in home
furniture stores and food manufacturing.
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Recent Improvements in Economic Well-Being in
Flathead County
By nearly every measure, the quality of economic
life in the Flathead is improving. Per capita
income is steadily rising, median income is
recovering after losses in the 80s, poverty is
falling after rising in The previous decade, and
unemployment is at a 30-year low.
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Recent Per Capita Income Gains by Flathead
County   The chart in the upper right shows per
capita income for Flathead County residents over
time in inflation-adjusted 2000 dollars. Per
capita income levels statewide also are
shown.   Per capita income has steadily risen in
Flathead County over the last ten years with a
couple of exceptions 93-94 and 98-99. In
1992 per capita income for Flathead Co. was
20,397. This compared with 19,769 statewide
a difference of about 630 per person. Ten years
later in 2002, Flatheads per capita income had
risen to 24,735 as compared to a statewide
average of 24,008 a difference of about
730.   Real gains in per capita income come
begrudgingly and they are especially difficult to
attain in the midst of fairly dramatic industry
restructuring and change as has been occurring in
the Flathead.
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Major Population Centers or Region Cores and
Closely-Linked Counties in the West
50
Montana Cities Population Peers in the West 48
City-Centered READ Regions with core populations
between 30,000 and 90,000 and region-wide
population between 58,000 and 150,000
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Flathead Peer Counties In the West
Of the 51 largely non-metro counties nearby major
national parks in the West, 10 contain small
regional population centers under 50,000
population (shown in dark gray). Flathead County
is one of these. There are 57 other counties in
the West with similar population characteristics
to these 10 counties that arent nearby major
parks. One of the 10 national parks counties
(Coconino, AZ) has an American population of 25
or more, as do two of the 57 non-park counties.
53
Comparing Recent Population Trends National
Parks Peers vs. Non-Park Peers in the West   The
dramatic shift in migration patterns in the West
over the course of the last ten to fifteen years
is the biggest factor in the recent surge in
population growth in non-metro areas nearby major
national parks. Study after study of recent
trends in migration concludes that growth in
non-metro areas is heavily associated with area
amenities and community characteristics. Areas
with high amenities and nice communities are
attracting most of the growth, while growth
continues to escape areas perceived as lacking in
these qualities.   Population growth for two
periods is compared for peer counties of Flathead
County. National Parks peer counties are 10
counties nearby national parks with small and
large regional population centers. One of these
counties is Flathead. The Non-Park peers are
57 other counties in the West with similar
population characteristics that arent located
nearby parks.   The base populations of the 10
Parks peers were increased by 14.9 between 1990
and 1999, while Non-Park peers grew by only 2.0.
And total population growth for the 10 Parks
peers grew by 26.6 between 1990 and 2000, as
compared to only 10.7 for the Non-Park peer
counties.

54
Recent Change Parks Peers vs. Non-Parks Peers
Several different indicators are used to compare
quantitative economic growth and change for
National Parks peer counties and Non-Park peers
of Flathead County. The Parks county peer group
has two and a half times the population
Growth of the Non-Park peers. The Parks peers
also are seeing much higher growth in total
employment, total personal income, and total
wages and salaries. Growth in Flathead county
exceeds growth in both sets of peers in all
categories.
Peer counties with American Indian populations
greater than 25 are eliminated, reducing the
number of peer counties in each group to 9 (Parks
cos.) and 55 (non-Park cos.)
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Lessons to Learn from Emerging Economic
Patterns   Look Forward Promising strategies
for economic improvement must reflect where the
economy is going, not where it has
been.   Customize Strategies Needs and
opportunities vary widely from place to place.
Goals and strategies must likewise vary.   Cities
Matter Recognizing that most growth is focusing
in and around city regions, more attention
needs to be focused on the needs of cities as the
settings if not the engines of economic
growth, diversification, and advancement. In
Montana, we need to assist cities, not deny that
we have any.   Urban-Rural Relations Matter
Pursuing economic development town-by-town or
county-by-county is difficult. Influencing local
economies sub-region by sub-region with healthy
urban-rural partnerships has potential.   Become
Learning Communities Successful businesses
are adaptive businesses. Successful communities
are adaptive communities. Adaptive communities
must be learning communities, keeping abreast
of change.   Think about Regional Positioning
Local economies cant be remade by local leaders.
What they can do is find ways of better
positioning themselves businesses, schools,
work forces, governments, families for future
change. Anticipate future change and position
yourself for it.   Human-Resource Based Economy
The economy is less and less natural resource
based, and more and more human resource based.
Do we know how to invest in human resource
development? Well-designed, well-funded,
adaptive systems for education and work force
development are essential for economic
prosperity.   Environment as a Key Economic
Asset In the new economy, a quality
environment is a key economic asset. Protecting
and enhancing environmental qualities is not the
enemy of economic development. It is essential
for economic prosperity.
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The Flatheads Primary Economic Opportunity and
Challenge
The opportunity lies in using current area growth
as a bridge in the process of re-tooling and
transitioning the areas economy, better
positioning Flathead County and its communities
for future prosperity.   The challenge lies in
not permitting the very qualities that bring more
and more people and businesses to the Flathead to
be irreparably degraded and lost as this growth
continues. In order for growth to be sustained
and in order for growth to provide both
quantitative and qualitative gains for the area,
it must be managed and guided.

64
Areas of Major Population Growth or Decline, 1990
- 2000   Population change across the region is
being heavily driven by migration patterns,
including fairly heavy recent migration into many
areas of the Rocky Mountain West region,
continuing out-migration from many non-metro or
rural areas of the Plains region, and a more
mixed pattern along areas of the Central Front of
the Rockies. Population growth is heavily
focused in many areas of the greater Interior
West, stretching from western Montana, Idaho and
eastern Washington in the north to Colorado, Utah
and Nevada and further south into the larger
Southwest region. Growth in Montana is heavily
focused in the Western Mountain region - areas
like the Flathead valley, the Missoula and
Bitterroot valleys, Gallatin valley and Beartooth
area. Population decline remains focused in the
Interior Plains region and is particularly heavy
in the northern portion of the Plains region.
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Post 2000 Census Population Trends in Montana
West-to-East   The pattern of population change
that emerged in the decade of the 90s is largely
continuing in Montana with growth heavily focused
in the Western Mountain region and decline
focused in the Eastern Plains. Along the Central
Front, population continues to grow, but this
growth is heavily focused in Yellowstone
County.   Counties with the biggest increases in
population are 1 Gallatin, with an increase of
5,412 (8 increase), 2 Flathead, with an
increase of 5,014 (6.7), 3 Yellowstone, up
3,839 (3.0), 4 Missoula, up 2,814 (2.9), 5
Ravalli, up 2,592 (7.2), and 6 Lewis and Clark,
up 1,421 (2.6). Next are Lake and Jefferson
Counties. Virtually every county in the Eastern
Plains is continuing to lose population.
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Post 2000 Census Population Trends in Montana
Urban vs. Rural   Population trends continue to
break in favor of the states urban areas and
regional centers, as well as their surrounding
counties. Decline remains centered in many
isolated rural areas of the state.   The upper
chart shows population change between 2000 and
2003 for the states seven regional center
counties at the far left, followed by change for
the 26 counties most closely-linked to these
regional centers. At the far right in the chart
are the 23 counties that are more isolated and
rural and also, primarily in the eastern Plains
portion of the state. With only a few
exceptions, nearly all of these counties are
losing population. Meanwhile, only two of the
seven regional center counties is losing
population Cascade and Silver Bow.   Among
closely-linked counties, Ravalli County by far is
the fastest growing, followed by Lake and
Jefferson Counties.
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Major Population Centers or Region Cores and
Closely-Linked Counties in the West
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Per Capita Income in the West Urban vs.
Rural Per capita income from one place to the
next is heavily affected by how urban or
rural an area is per capita income is almost
systematically higher in larger cities and urban
places than it is in rural places. The chart in
the upper right shows per capita income in 2001
for counties in the 22 contiguous western states
(1500 in all) by degree of urbanization, with the
most urban places to the left in the chart and
the most rural ones to the right.   Per capita
income is systematically higher in major
population centers or region core areas than it
is in counties surrounding these region cores
(closely-linked counties). And income in rural
and more isolated areas is lower than in urban
areas and communities surrounding them. These
relationships also have held firm for many years,
as shown in the lower chart.
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City Regions of the Rocky Mountain West The 22
city regions within the Rocky Mountain West
region are listed in the chart at the right and
rank-ordered from top to bottom by size of the
region-wide population, which includes the
population of each region core area (one or
several counties where a primary regional
population center is located) and the
closely-linked surrounding counties. The city
regions are identified by each regions principal
population center and these are color-coded
according to where each region fits within the
READ systems classification scheme for city
regions. The chart shows region core and
region-wide populations for each city region for
both 1980 and 2003.   Based upon region-wide
populations in 2003, the most populated city
region in the Rockies is Denver with nearly 2.6
million people, followed by Salt Lake City at 2.1
million. The population of the third ranked city
region drops off considerably from the second,
with Colorado Springs/Pueblo at 820,000, followed
by Spokane at 690,000. The Boise region ranks
fifth at 580,000, followed by Fort Collins at
507,000. There is another large drop off in
population in going to the seventh ranked region
Grand Junction at 246,000. The next 11 city
regions are modest in size ranging from Billings,
MT, at 185,000 (8th) to Bozeman, MT, at 96,000
(18th). The last four have region-wide
populations under 90,000.