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1 Montana Manufacturing & Forest Products: 2009 Outlook Todd A. Morgan, CF

2 Montana Manufacturing Industry 2008 Relatively good 1 st half of year. Few firms curtailed production. Few firms had worker shortages. Most said sales were same or increased from Few declines outside of forest products industry.

3 Montana & U.S. Manufacturing Employment MT workers 28,000 US workers 21,000,000 24,000 18,000,000 20,000 16,000 Montana U.S. 15,000,000 12,000,000 12, ,000,000 Source: BEA-REIS SA-05N, SA-25N

4 Montana Manufacturing Total firms: 3,100 Total Employment: 24,000 Total Labor Income: $1.3 billion 2007 Labor Income Distribution Metals 12% Chemicals & Plastics Nonmetallic 6% Minerals 4% High Tech 9% Petroleum & Coal 17% Other 13% Printing 4% Sources: BEA-REIS; Census Bureau Food & Beverage 10% Wood & Paper 25%

5 Lewis & Clark County Manufacturing Estimated 2008 Labor Income Distribution Wood Products 11% Aeronautics & Other 30% Total Labor Income: $63 million Total Employment: 970 Metals 16% Food & Beverage 6% Chemical, Clay & Glass 37%

6 Cascade County Manufacturing Estimated 2008 Labor Income Distribution Food & Beverage 49% Total Labor Income: $51 million Total Employment: 1,000 Wood Products 6% Printing & Related 10% Other 35%

7 Missoula County Manufacturing Estimated 2008 Labor Income Distribution Total Labor Income: $143 million Total Employment: 2,800 Chemical 13% Other 19% Wood & Paper 57% Food & Beverage 11%

8 Yellowstone County Manufacturing Estimated 2008 Labor Income Distribution Petroleum & Chemical 52% Total Labor Income: $304 million Total Employment: 3,900 Metals 13% Printing & Related 4% Food & Beverage 10% Other 21%

9 Gallatin County Manufacturing Estimated 2008 Labor Income Distribution Chemicals 8% Metals 16% Textiles 8% Cement, Clay & Glass 10% Food & Beverage 7% Total Labor Income: $161 million Total Employment 3,100 Other 38% Furniture & Wood 12%

10 Silver Bow County Manufacturing Estimated 2008 Labor Income Distribution Other 8% Total Labor Income: $35 to 40 million Food & Beverage 26% Total Employment: 630 to 680 Chemicals, Cement & Glass 48% Metals & Wood 18%

11 Flathead County Manufacturing Estimated 2008 Labor Income Distribution Total Labor Income: $201 million Metals & Related 10% Hi-Tech, Other 34% Total Employment: 4,200 Lumber & Wood 56%

12 Montana Manufacturers Survey annual survey conducted in Nov/Dec open-ended & multichoice questions current & coming year 216 firms contacted response rate 75%

13 Housing Starts vs. Timber Harvest Housing Starts vs. Timber Harvest 2,000 MT timber harvest US housing starts 2.5 1,600 1, Million Board Feet Scribner Million Home Starts 0

14 Montana Forest Products Outlook for the Coming Year Percent of Firms Outlook for 2008 Outlook for % 40% 20% 28% 50% 35% 37% 44% 6% 0% Better than last year Same as last year Worse than last year

15 Forest Products Employment Outlook for the Coming Year Percent of Firms 75% 50% Outlook for 2008 Outlook for % 57% 25% 0% 18% 6% 8% 37% More than last year Same as last year Fewer than last year

16 Montana Forest Products Forecast 2009 will be worse than past three years More closures & curtailments Lumber production down 10-20% Employment down 15-25% Timber harvest down, likely lowest volume since WWII

17 Montana Manufacturing Outlook for the Coming Year Percent of Firms 60% Outlook for 2008 Outlook for % 45% 35% 41% 38% 20% 19% 18% 0% Better than last year Same as last year Worse than last year

18 Manufacturing Employment Outlook for the Coming Year Percent of Firms 60% 40% Outlook for 2008 Outlook for % 53% 20% 36% 29% 0% 15% 5% More than last year Same as last year Fewer than last year

19 Lewis & Clark County Manufacturing Outlook for 2009 Percent of Firms 75% 50% 75% 25% 25% 0% Better than 2008 Same as 2008 Worse than 2008

20 Cascade County Manufacturing Outlook for 2009 Percent of Firms 60% 40% 42% 42% 20% 0% 16% Better than 2008 Same as 2008 Worse than 2008

21 Missoula County Manufacturing Outlook for 2009 Percent of Firms 60% 40% 37% 42% 20% 21% 0% Better than 2008 Same as 2008 Worse than 2008

22 Yellowstone County Manufacturing Outlook for 2009 Percent of Firms 60% 40% 39% 52% 20% 0% 9% Better than 2008 Same as 2008 Worse than 2008

23 Gallatin County Manufacturing Outlook for 2009 Percent of Firms 60% 40% 20% 24% 42% 34% 0% Better than 2008 Same as 2008 Worse than 2008

24 Silver Bow County Manufacturing Outlook for 2009 Percent of Firms 100% 75% 100% 50% 25% 0% Better than 2008 Same as 2008 Worse than 2008

25 Flathead County Manufacturing Outlook for 2009 Percent of Firms 75% 69% 50% 25% 0% 6% 25% Better than 2008 Same as 2008 Worse than 2008

26 Montana Manufacturing Forecast for 2009 Expectation of substantial declines Loss of 1,000 to 2,000 jobs Lower production, profits, sales & capital expenditures Recovery in 2010?

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