Construction and real estate dominate Flathead’s growth

When the pandemic triggered nationwide migration two years ago and led to an influx of residents into Montana, Flathead County’s population grew by 3.5%, more than any other county in the state, adding 3,700 residents between 2020 and 2021, according to the Montana department. Labor and Industry (DLI) Labor Day Report 2022.

Population growth has led to high demand for housing, driving up housing costs, and home prices have increased 90% from August 2020 to August 2022 in Flathead County, compared to 44% statewide , which has impacted housing affordability, said DLI public information officer Jessica Nelson. in an email to the Beacon.

But as house prices rise, economists say wages are not keeping up with growth and private sector hourly earnings have risen only 8.5%, inhibiting labor supply work as baby boomers continue to retire.

“Housing costs are rising faster than incomes, straining household budgets and can affect workers’ ability to live close to work,” Nelson said.

Additionally, home values ​​in Montana are higher than the national average, while average wages in Montana are lower than the rest of the country, making it difficult for workers to buy homes.

While wages have seen significant growth amid a nationwide labor shortage, Montana immigration has added to the labor market. Although the labor force has grown at a slower rate than population growth, economists say baby boomer retirements are the main driver of labor shortages.

Of a statewide population of more than one million, only 63.5% of that population is employed or available for work, the report said.

More than 200,000 Montanese are currently retired, according to a demographic survey, and economists believe the pandemic has triggered early retirements. But the data also suggests that a greater proportion of people over the age of 65 are still staying in the workforce compared to 20 years ago, which economists attribute to employers offering more flexible hours.

“The population of baby boomers reaching retirement age and leaving the workforce is the primary cause of slow labor force growth in Montana and the United States,” Nelson said. .

Despite a labor shortage, Montana’s business economy continues to grow, with construction and real estate dominating Flathead County’s growth from 2019 to 2021, reflecting demand for housing and lending services as demand exceeds supply. The hotel and restaurant and health care industries also created more jobs compared to recent years.

As Montana has seen significant economic growth in 2021, many new businesses have also been added to the state, with 27% of workers being self-employed, which has also resulted in the creation of new jobs. The state added a record 4,697 new business establishments in 2021, breaking the 2020 record of 1,200. The new businesses were mostly in the professional and business services sector, likely reflecting an influx of remote workers, says The report.

Economists predict labor shortages will continue to challenge growth in Montana and data suggests there are very few available workers who aren’t already attached to an employer. Business owners are adapting to the limited labor supply and investing in better training and labor-saving technology and productivity continues to rise.

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