MTPR

Health Care Driving Growth In Flathead Economy, Researchers Say

Feb 6, 2018

Health care has emerged as a major driver of the Flathead Valley economy, researchers from the University of Montana and local experts said Tuesday. MTPR's Nicky Ouellet reports from the 2018 Economic Outlook Seminar in Kalispell.

A decade ago, healthcare wasn’t much of a talking point when it came to the Flathead Valley’s economy. But last year, it accounted for 14 percent of the Valley’s economic activity.

That’s according to Patrick Barkey, director of the University of Montana’s Bureau of Business and Economic Research.

"What's happening with health care in the Flathead Valley is just incredible. And it's really attracting a lot of health care businesses from around the state, and that's now turned into a pretty powerful driver of the local economy," Barkey says.

The industry is now equal to wood products, and just one percent behind manufacturing in terms of economic activity in the Flathead. Tourism leads the way at 19 percent of activity. But growth in health care outpaced every other industry in Flathead County from 2007 to 2016, bringing in $10 million more in 2016 than the prior year.

"The movement in growth, the most impressive movement, has been this already fast growth in health care, which grew much more rapidly in 2016, and of course we know that's carried through to this day with some of the expansions that are still taking place," Barkey says.

Those expansions include new specialty care facilities scheduled to open this year, like the Montana Children’s Medical Center, the Digestive Health Institute of Montana, and the upgrade and modernization of the Kalispell Regional Medical Center’s Emergency Room.

Joe Unterreiner, president and CEO of the Kalispell Chamber of Commerce, says  investments to the Valley’s health care facilities will total more than $75 million in 2018.

"Just impressive numbers coming in terms of job creation and hiring, and investment in the health care industry for Flathead County," Unterreiner says.

Pat Barkey with the Bureau of Business and Economic Research adds it’s not just health care seeing growth in the Flathead.

Patrick Barkey, director of the BBER, presenting the 2018 Montana Economic report in Helena, Tuesday, January 23, 2018.
Credit Corin Cates-Carney

"You can also see some of the tech-related growth, trade center related growth. Professional services is really a lot bigger. It's a diverse industry, includes everything from accountants and lawyers and tech folks are in there, finance," Barkey says.

But other industries central to the Valley’s economy, like construction and manufacturing have stagnated since 2007.

"You look at construction, that's just 82 percent of what it was 10 years ago," Barkey says," which is rather amazing when you think about construction activity."

Barkey says the lagging growth is partly because construction activity in 2007 was "amazing" and set a high bar. He adds that 2017 was a good year for construction. In comparison, manufacturing and tech development in the Flathead is not as strong as other parts of Montana.

Looking ahead, Barkey says earnings growth in the Valley has fallen a bit short of expectations in recent years, but expects that to turn around in 2018.

"We think the economy is going to improve here to about 3.5 percent  to 4 percent growth for the next three to four years. That’s one of the faster growths among counties in the state."

Barkey also cited a job growth forecast by the national firm IHS Markit, which predicts a steady 1.5 percent job growth in Flathead County now through 2021.

Joe Unterreiner with the Kalispell Chamber of Commerce wrapped up the session by ticking off dozens and dozens of scheduled openings for new businesses this year.

"We can expect a church and two breweries and a distillery, amongst a few other things," Unterreiner says.