Report: Impacts Of COVID-19 On State Economy Will Be Large, Possibly Short-Lived
Montanans will face a “broad-based recession of greater magnitude than what was experienced in 2008-09” in 2020, according to an analysis of the state economy released today by the Bureau of Business and Economic Research at the University of Montana.
The BBER report details the swift contraction expected in the economy due to the COVID-19 pandemic, ending a nine-year period of job growth in the state.
Since comprehensive data on state and local economic activity are slow to arrive, BBER conducted this preliminary analysis to help local governments, businesses and households understand the economic challenges they will face in the coming months. The analysis also seeks to provide an understanding of what the rapid changes in national and global economic events mean for the specific pieces of the Montana economy.
Principal findings of the analysis are: The Montana economy will see a loss of more than 50,000 jobs over the 2020 calendar year, which is more than what was originally forecast.
Personal income in 2020 will be $3.9 billion lower in Montana than was originally projected — a 7.3 percent shortfall.
Nearly every major industry in Montana will have lower employment in 2020, with job losses greater in the northwest region.
Stronger economic growth, beginning at the end of this year and continuing into 2022, could return overall economic activity to levels close to what was projected before the COVID-19 pandemic, which is back within the range of medium-term growth.
“The strong bounce back in the national and state economies is perhaps the most problematic part of this forecast,” BBER director Patrick Barkey said. “Pandemics of this scale are outside the experience of most economic models, so this projection is made with less confidence.”
BBER will revisit and possibly revise its analysis as more information on the fast-moving situation becomes available. Established in 1948, BBER is the main research unit of UM’s College of Business.
The bureau’s researchers engage in a wide range of applied research projects that address different aspects of the state economy, including survey research, economic analysis, health care research, forecasting, wood products research and energy research. For more information, visit bber.umt.edu or call 406-243-5113.