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Economic Growth Bozeman Montana

By
Real Estate Agent with PureWest, Inc.

 

The media is all abuzz with news of the economy these days.  Be it the Internet, television, radio, or any source, all are talking about the economy.  However, there is one phrase in particular that tends to permeate the conversation: "economic growth."  What is economic growth?  What drives it?  What hinders it?  What can we do to increase it?  These questions are especially relevant to the Bozeman area, as well as to Gallatin County as a whole.
            First, let's take a look at a couple of the indicators of economic growth and how they have been faring for our valley.  Three in particular seem to stand out: population growth, number of bank deposits, and resiliency to economic change.  Positive population growth and increases in the number of bank deposits are typically construed as good economic growth indicators, while the ability to be resilient to economic change demonstrates a strong economic base that will likely continue to grow.
 
In terms of population growth, it is pretty safe to say that Bozeman and the Gallatin Valley have been increasing over the past decade.  Even in the short five years that I myself have lived here, I have witnessed substantial increases in both land development and overall population.  In fact, since 2000, the most recent data shows that Bozeman has grown 27.4%, well outpacing the Montana rate of 7.2% and the national rate of 5.9%.  What is even more fascinating is the fact that despite the recession, Bozeman still featured positive population change percentages, meaning that the population was still increasing in the face of all the economic turmoil experienced across our country.  These numbers indicate that not only is moving to Bozeman a popular trip to make, but that it will continue well into the future; specifically, the 2025 population of Bozeman is projected to reach up to 92,500, with the county population reaching 112,120.
 
 
Just as population has increased, so too have the number of bank deposits increased, especially in the Gallatin Valley.  When looking at the entire area as a whole, Bozeman itself comes out to the major contributor of bank deposits, accounting for 77% of the total number.  The 27 full service banks, as of the summer of 2008, posted $1.233 billion in deposits, a new record for our city (Prospera Business Network).  Intuitively this makes sense, as number of deposits should increase with increasing population.
 
            Finally, economic resilience is what really tests the economic mettle of a location.  Your city, county, or state can have all of the best indicators and numbers in the world, but what matters when it hits the fan is how well you can weather the storm and how quickly you can recover.  The numbers are in, and Gallatin County has never looked better.  In the wake of the past five negative economic events (mostly recessions), Gallatin County has outpaced both Montana and the country as a whole in recovery every single time.  There is no question; we truly do live in one of the best last best places on earth. 
 
           While others do exist, I have narrowed down the group to six main drivers: Technology and Manufacturing, Tourism, Gallatin Field Airport, Montana State University, Bozeman Deaconess (with corresponding health services), and Real Estate and Development.  This article will give a brief overview of each, while following blogs will delve deeper into each topic individually.

Technology and Manufacturing: This sector has seen a significant increase in the past ten years, with high tech companies jumping from 20 to 53 total and manufacturing increasing into the thousands of companies.  The two industries combined employ over 6,000 people in the Gallatin County (Prospera Business Network).

Tourism: As anyone who lives in this area during the summer knows, tourism is huge.  The sector itself is estimated to make up roughly 15% of Gallatin County's overall economic base, and is made possible by the many amenities we enjoy in Big Sky Country (University of Montana).  The sector is said to employ nearly 5,000 jobs and reportedly earned $3 billion in 2008 (Prospera Business Network).

Gallatin Field Airport: Our airport is currently the second busiest in the state and is growing at the quickest rate of any in the state (Prospera Business Network).  It provides the necessary transportation to bring people into the state to spend their money, while allowing our professionals to leave the state and make us money.  Its current renovations will open up even more direct flights, bringing that much more positive impact to the valley.

Montana State University: MSU is considered the "Economic Anchor" of Bozeman (Prospera Business Network), making up the better portion of 40% of our economic base (the other portion is held by local and federal government operations) (University of Montana).  It is responsible for giving Bozeman the highest education level of the state (Headwaters Economics), and continues to churn out many knowledgeable minds for our workforce. Furthermore, as will be covered in more detail in its forthcoming blog, Montana State University enrollments have continually been on the increase,
reaching a record 12,674 students this past fall.

Bozeman Deaconess and Related Health Services: Health services in the Gallatin County employs nearly 3,400 workers, with 154 practicing physicians that represent roughly 50 specialties (Prospera Business Network).  Such a diverse range of physicians not only provides an excellent standard of health care, but also gives peace of mind to the many who live, or are considering living, in the surrounding area.
 
Real Estate and Development: Going hand in hand with the booming population growth described in the first few paragraphs is the increasing development of Bozeman properties and the many new Bozeman homes for sale. Unfortunately, this sector was hit the hardest due to the burst of the housing bubble. To illustrate, the number of realtors in Gallatin County has dropped from 853 licensed realtors in 2007 to 622 in 2009. Furthermore, the most recent data shows home sales in just Bozeman have gone from their peak of 816 in 2005 to 502 in 2008, with median home prices dropping over $35,000 in just as much time (Gallatin Association of Realtors®).  
Continual development of Big Sky real estate also makes up a significant portion of this economic driver’s contributions. However, over the past decade, the growing popularity of Bozeman for both primary and secondary home owners has been a dominant economic driver.   The development of Big Sky, Spanish Peaks, Yellowstone Club and Moonlight Basin have had a tremendous positive impact upon the growth of our community, job creation, and economic development.   Today this has slowed, but the longer-term benefits will continue to help Gallatin County.
 
(Graph: www.city-data.com)   
Our population is well-educated, at both the high school and college level.   As the global forces of competition place greater stress on domestic lower-skilled jobs, Gallatin County benefits from a world-class high school and a world-class university. The combination of these educational institutions is very attractive to employers---particularly as the population and services of Bozeman continue to grow.
Our cost of living continues to be low by national standards.   Not only does our area represent a superior work force and a enviable place to reside—but Americans can do so for less costs. In the long run, as the airport facility expands and as our recreational base of Big Sky expands, more employers will want to take advantage of the cost/work force/quality of life offering of our area.

 

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