A SocioEconomic Profile

Transcription

1 A SocioEconomic Profile Montana Produced by the Economic Profile System (EPS) October 25, 2006

2 About EPS About The Economic Profile System (EPS) This profile was produced using the 2004 version of the Economic Profile System (EPS), last updated in September EPS is designed to allow users to automatically and efficiently produce detailed socioeconomic profiles at a variety of geographic scales using the spreadsheet program Microsoft Excel. Profiles contain tables and figures that illustrate long-term trends in population; employment and personal income by industry; average earnings; business development; retirement and other non-labor income; commuting patterns; agriculture; and earnings by industry. Databases used for EPS profiles are from: Bureau of the Census, County Business Patterns, Bureau of Labor Statistics, and the Regional Economic Information System (REIS) of the Bureau of Economic Analysis, U.S. Department of Commerce. EPS was developed in partnership with the Bureau of Land Management by Ray Rasker, Jeff van den Noort, Ben Alexander and Patty Gude when they were employees of the Sonoran Institute, and continues to be refined and improved by these authors under the auspices of their new organization, Headwaters Economics. EPS is available for free download from Headwaters Economics ( For technical questions about EPS, contact Jeff van den Noort at jeff@headwaterseconomics.org. Headwaters Economics conducts social science research to understand demographic and socioeconomic trends and their impacts on changing land use patterns. We use this knowledge to assist individuals, organizations and communities to benefit from their competitive advantages. The Bureau of Land Management (BLM), an agency within the U.S. Department of the Interior, administers 262 million surface acres of America's public lands, located primarily in 12 Western States. The BLM sustains the health, diversity, and productivity of the public lands for the use and enjoyment of present and future generations. The Sonoran Institute promotes community decisions that respect the land and people of the West. Working with communities since 1990, we believe people make the best decisions about their future when they look at the big picture, work collaboratively and create practical, local solutions. The Institute encourages public participation, civil dialogue and practical solutions that benefit each community as a whole. We believe informed and engaged citizens boost the resilience of a community s economic and natural systems.

3 Table of Contents Cover About the Economic Profile System Table of Contents Read This First Demographic, Employment and Income Trends Demographic, Employment and Income 1 Population Trends 2 Population 3 Age and Gender 4 Income Distribution & Housing 5 Employment 6 Employment 7 Personal Income 8 Proprietors 9 Non-labor Income 10 Transfer Payments 11 Personal Income 12 Government Employment 13 Earnings Per Job 14 Per Capita Income 15 Firms by Industry 16 Firms by Industry in 2004 (NAICS) 17 Firms by Size 18 Unemployment Trends 19 Commuting 20 Agriculture (Business Income) 21 Relative Performance Comparisons Relative Performance Comparisons 22 Employment Diversity Index 23 Stability 24 Performance Comparisons 25 Employment and Personal Income by Industry Employment and Income by Industry 26 Read This First 27 Employment (SIC) 28 Employment (NAICS) 29 Personal Income (SIC) 30 Personal Income (NAICS) 31 Wages and Employment 32 Data Sources Data Sources Methods Methods Glossary Glossary Table of Contents

4 Read This First There are two related systems for producing socioeconomic profiles: this one, the Economic Profile System (EPS) and the Economic Profile System Community (EPSC). For best results, use both profile systems. Below is a table highlighting how the two systems complement each other. Geographic level of detail Databases used Time series used Advantages Disadvantages EPS Nation Region (metro, non-metro, total) State (metro, non-metro, total) County Bureau of the Census (Census) County Business Patterns (CBP) Bureau of Labor Statistics (BLS) Bureau of Economic Analysis (BEA), Regional Economic Information System (REIS) Continuous data from to as close to the present as possible. Long-term trend analysis; changes in employment and personal income by sector, change of businesses establishments by type and size, and non-labor sources of income, like retirement and age-related income. Counties are compared to states and nation. For some counties employment and personal income data may be suppressed for some industries and for some years. EPS includes a system for estimating these data gaps, and a chapter in the EPS User s Manual profiles stepby-step instructions. EPSC Nation, Region, Division, States, Counties, County Subdivisions, Places (Towns), Indian Reservations, Congressional Districts Bureau of the Census, Decennial Census of Population and Housing, 1990,. (1990 to comparisons at the county level only). At the county level only 1990 to comparisons can be made to show changes in age and household income distribution. Age distribution, race, housing costs, housing affordability, education rates, poverty. Finer geographic detail. Allows comparisons to user-selected benchmark areas. Census data is not suppressed, but it is less useful than REIS data used in EPS for long-term trends by industry; it is only available only for. Important notes: 1) 2) 3) 4) Total employment figures from the Bureau of the Census (used in EPSC) and the Regional Economic Information System (used in EPS) can differ for the following reasons: - Census employment figures are reported by place of residence, while BEA REIS figures are by place of work. - BEA REIS counts all jobs, regardless of whether part-time or whether a person has several jobs. For example, if a person has three part-time jobs, they count it as three jobs. - In some areas seasonality may play a role: the census is taken in the spring, a shoulder season for many resort areas, while BEA REIS data is an annual average. Tables and charts may be copied from Excel into any other program, like Word or PowerPoint: highlight the selection, choose copy from the edit menu, then open Word or PowerPoint and insert by choosing "Paste Special" in the Edit Menu. We recommend that you paste charts as a picture. EPS is updated every year with the latest figures. This profile also shows business cycles, represented as vertical bars on selected charts. Introduction

5 Demographic, Employment and Income The following pages (2-25) contain long-term trends in demographics, employment and income, for types of information where no disclosure restrictions occur. What is a disclosure restriction? A disclosure restriction means a gap exists in the data. Information has been suppressed by the U.S. Department of Commerce to avoid disclosure of confidential information. Generally, the smaller the geographic level of analysis and the smaller the population of the county, the higher the chances that industry-specific information is suppressed and that disclosure restrictions will occur. The last section of this profile contains long-term trends on employment and personal income by industry sector (services, retail trade, manufacturing, etc.). This type of data often has data gaps, or disclosure restrictions. EPS has a built-in system for estimating data gaps through for the 11 contiguous western states (AZ, CA, CO, ID, MT, NM, NV, OR, UT, WA, WY). In this section you will learn about: 1. Changes in population, age distribution, household income distribution and housing affordability. 2. Comparisons of the county to the state and the nation. 3. Employment and income by type: proprietors versus wage and salary. 4. Personal income by type: labor versus non-labor income. 5. The role of transfer payments. 6. How well do we recover from recessions? 7. Trends in government employment. 8. Earnings per job versus per capita income. 9. Growth in firms by size and industry type. 10. Unemployment rates. 11. Cross-county flow of dollars via commuting. 12. Trends in agricultural businesses. Demographic, Employment and Income Trends Page 1

6 Population Trends Population Population Trends From to 2004 population grew by 229,748 people, a 33% increase in population. At an annual rate, this represents an increase of 0.8%. Thousands of People 1, , The vertical shaded bars on the figure below represent the last five recession periods: November 1973 to March 1975; January 1980 to July 1980; July 1981 to November ; July 1990 to March 1991; March 2001 to November More information about recessions is available on the next page. Population Growth Compared to the Nation Over the last 34 years population growth in Montana has been slower than the nation. Population growth is not generally impacted by national recessions. Population (Index =100) Population Population Comparison Comparison Recession Bars Montana Montana United States Recession Bars Montana United States Source: BEA REIS 2004 Table CA30 Page 2 Demographic, Employment and Income Trends

7 Population How well do we recover from recessions? An important indicator of economic performance is the ability to recover quickly from recessions. A recession is defined by the National Bureau of Economic Research as a significant decline in activity spread across the economy, lasting more than a few months, visible in industrial production, employment, real income, and wholesale-retail sales. The graph below shows how well we have recovered from the last five recessions. The recovery period used is from the end of one recession (the trough) to the beginning of the next recession (the peak). This type of graph is repeated throughout the profile to show how the region recovers from recessions compared to the state and the nation. See for more information about business cycles. In the latest recovery (2001 to 2004), population growth in the United States (up 1.0%) has outpaced Montana. Similarly, in the last recovery (1991 to 2001), the United States (up 1.2%) grew the fastest. In the recovery from to 1990, the United States (up 0.9%) grew the fastest. Annual % Change (2004 $) 1.4% 1.2% 1.0% 0.8% 0.6% 0.4% 0.2% 0.0% -0.2% 1.0% Population Growth During Recent Recoveries - Annualized % Change from trough to following peak 1.1% 0.8% 1.0% -0.1% 1975 to to 1981 to to to % 1.1% 1.2% 0.8% 1.0% Montana - Population United States - Population Source: BEA REIS 2004 Table CA30 Demographic, Employment and Income Trends Page 3

8 The population has Population by Age and Sex The age group that has grown the fastest, as a share of total, is 45 to 49 years, up 28,265 people. Their share of total rose by 2.5% Age and Gender (From EPSC) gotten older since The median age Density in is 37.5 years, up from 33.8 years in Total Under 20 years (Baby Boom in ) 65 years and over Median Age (Pop. per sq Number NumberShare NumberShare NumberShare mi.) Total Population 902, ,440 29% 210,449 23% 120,949 13% The largest age , ,346 31% 140,890 18% 106,497 13% category is 40 to Yr. Change 103,130 13,094-2% 69,559 6% 14,452 0% years old (75, Yr. % Change 13% 5% 49% 14% 11% 13% people or 8.4% of the Sex Breakout total). Male 449, ,480 29% 105,587 23% 52,942 12% 36.6 Total Population in Female 452, ,960 28% 104,862 23% 68,007 15% 38.5 was 902,195 Male/Female Split 50% / 50% 51% / 49% 50% / 50% 44% / 56% people, up 13% from Table SF1 - P12 & 1990 SF1 Table P05 & P12 799,065 in In the graphs below, changes in population by age are shown two ways. The "Change in Population" graph illustrates how each age bracket has changed in the last 10 years. The "Change in Share" graph illustrates how each category has changed as a share of total. Note that an age bracket can have an increase in population while declining as a share of total. The "Change in Share" graph usually demonstrates how the baby boom has caused a demographic shift in the population (growth in the age brackets). Note: In aggregated profiles, medians are interpolated. Breakout Change in Population (90-) Change in Share of Total (90-) 85 years and over 80 to 84 years 75 to 79 years 70 to 74 years 65 and 69 years 60 and 64 years 55 to 59 years 50 to 54 years 45 to 49 years 40 to 44 years 35 to 39 years 30 to 34 years 25 to 29 years 20 to 24 years 15 to 19 years 10 to 14 years 5 to 9 years Under 5 years 10,4554,882 11,1267,264 13,762 10,941 15,933 14,045 16,731 15,810 19,009 18,936 23,310 23,864 30,075 31,615 36,491 36,907 38,296 37,065 33,703 32,877 26,115 26,060 24,715 26,389 28,034 30,345 34,521 36,789 33,641 35,657 30,141 31,822 26,657 28,212 4,661 4,861 3,295 1, ,629 13,169 24,517 28,265 16,777 1,592 14,784 5,007 10,610 14,497 6,399 3,414 4, % 0.3% 0.1% -0.2% -0.5% -0.1% 1.0% 2.2% 2.5% 1.0% -1.2% -2.6% -1.4% 0.5% 0.8% -0.2% -1.3% -1.3% Thousands of People Male Female Source: Census and Census Thousands of People Change % % 2.0% 4.0% Thousands % of People Change in Share Page 4 Demographic, Employment and Income Trends

9 Income Distribution Income Distribution & Housing (From EPSC) Household Income Distribution (Not adjusted for inflation) In 1999, for every household that made over $100K, there were 8.1 households that made under $30K. 10 years earlier, for every household that made over $100K, there were 36.9 households that made under $30K. Please note that the income distribution is not adjusted for inflation so some of the changes are due to inflation. Less than $10,000 $10,000 to $14,999 $15,000 to $19,999 $20,000 to $24,999 $25,000 to $29,999 $30,000 to $34,999 $35,000 to $39,999 $40,000 to $44,999 $45,000 to $49,999 $50,000 to $59,999 $60,000 to $74,999 $75,000 to $99,999 $100,000 to $124,999 $125,000 to $149,999 $150,000 or more 40,535 37,554 31,864 34,306 30,949 32,460 30,624 27,746 27,838 24,739 27,379 20,334 24,332 16,428 22,487 12,132 18,574 16,697 31,154 11,501 30,351 6,803 23,007 2,310 9,042 1,080 4,029 1,835 6,905 60, Thousands of Households Housing Affordability - Owner Occupied The housing affordability Owner Occupied Housing Affordability 1990 index is 144, which suggests that the median Specified owner-occupied housing units: Median value (Adjusted for $ 74,440 $ 99,500 family can afford the % of median income necessary to buy the median house 17% 17% median house. * Housing affordability has become less affordable in the last decade, from 147 in 1990 to 144 in. Income required to qualify for the median house $ 25,106 $ 28,116 Housing Affordability Index: (100 or above means that the median family can afford the median house.)* Universe: Specified owner-occupied housing units SF3 - H76 Income in: Per capita income $ 17,151 Median household income (Adj. for Inflation in $) $ 30,287 $ 33,024 Median family income (Adj.for Inflation in $) $ 36,949 $ 40,487 Universe: Total population, Households, Families SF3 - P82,P53,P77 * Note: The housing affordability figures assume a 20% down payment and that no more than 25% of a family's income goes to paying the mortgage. It is based on an interest rate of 10.01% in 1990 and 8.03% in. Use this statistic as a comparative, rather than absolute, measure. Source: Census and Census 1990 Demographic, Employment and Income Trends Page 5

10 Employment Long term trend From to 2004, 295,608 new jobs were created. From to 2004, the majority of job growth, 70% of new jobs, has been in wage and salary employment (people who work for someone else). Employment of proprietors contributed to 30% of new employment from to 2004, and 28% of new employment since. In, proprietors represented 23.5% of total employment; by 2004, they represented 26.5%. Thousands of Jobs Thousands of Jobs , , ,232 Employment by Industry Changes from to 2004 Wage and salary jobs Number of proprietors % of Total 2004 % of Total New Employme nt (70-04) % of New Employm ent New Employm ent (94-04) % of New Employm ent Total full-time and part-time employmen 301, , , ,608 99, % Wage and salary jobs 230, % 366, , % 208, % 71, % Number of proprietors 70, % 130, , % 87, % 27, % Number of nonfarm proprietors 5/ 44, % 106, , % 87, % 26, % Number of farm proprietors 26, % 24,118 25, % -427 NA 1, % Proprietors include sole proprietorships, partnerships, and tax-exempt cooperatives. A sole proprietorship is an unincorporated business owned by a person. A partnership is an unincorporated business association of two or more partners. A tax-exempt cooperative is a nonprofit business organization that is collectively owned by its members. Wage and salary employment refers to employees. Source: BEA REIS 2004 Table CA30 Page 6 Demographic, Employment and Income Trends

11 Employment How well do we recover from recessions? In the latest recovery (2001 to 2004), employment growth in Montana (up 1.8%) has outpaced the United States. Similarly, in the last recovery (1991 to 2001), Montana (up 2.4%) grew the fastest. In the recovery from to 1990, the United States (up 2.5%) grew the fastest. Annual % Change (2004 $) 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% 2.9% 2.7% Employment During Recent Recoveries - Annualized % Change from trough to following peak 0.9% 0.6% 1.3% 2.5% 2.4% 1.9% 1.8% 0.6% 1975 to to 1981 to to to 2004 Montana - Employment United States - Employment Job Growth Compared to the Nation Over the last 34 years job growth in Montana has been faster than the nation. Some areas can experience employment gains even during the recessions. If so, check to see how much is due to migration and population changes. Source: BEA REIS 2004 Table CA30 Jobs (Index =100) Jobs Compared to the State and Nation Recession Bars Montana United States Demographic, Employment and Income Trends Page 7

12 Personal Income Long term trend From to 2004, personal income added $13,378 million in real terms. The annualized growth rate was 2.2%. Income (Billions of 2004 $) Total Personal Income ,635 Importance of Proprietors In the last 34 years, wage and salary disbursements grew at an annual rate of 1.8%, outpacing proprietors' income which was roughly unchanged. 7.7% of new labor income from to 2004 was from proprietors' income. Income (Billions of 2004 $) ,154 2,988 Wage and salary disbursements Proprietors' income Wages and Salaries vs. Proprietors 2004 New % of % of % of % of Income New All income in millions of 2004 dollars Labor Labor 2004 Labor Income Labor Sources 9, % 12, % 16, % 7, % Wage and salary disbursements 6,623 72% 9,318 77% 12,154 75% 5, % Proprietors' income 2,440 27% 2,140 18% 2,988 18% % Nonfarm proprietors' income 1,289 14% 1,845 15% 2,720 17% 1, % Farm proprietors' income 1,151 13% 295 2% 268 2% (884) NA Wage and salary is monetary remuneration of employees, including employee contributions to certain deferred compensation programs, such as 401(K) plans. Proprietors is income of sole proprietorships, partnerships and tax-exempt cooperatives. A sole proprietorship is an unincorporated business owned by a person. A partnership is an unincorporated business association of two or more partners. A tax-exempt cooperative is a nonprofit business organization that is collectively owned by its members. Source: BEA REIS 2004 Table CA05N and CA30 Page 8 Demographic, Employment and Income Trends

13 Proprietors Definitions: Proprietors refers to employment and income from sole proprietorships, partnerships, and tax-except cooperatives. Wage and salary refers to employees; people who work for someone else. Are proprietors an important indicator of economic health? Growth of proprietor employment and income can be a healthy sign that opportunities for entrepreneurship exist. Another way to gauge the health of small business growth is to look at changes in businesses by type and size of establishment (later in this profile). Growth of proprietors can also mean that a rising number of people in the community want to (or need to) have side jobs in addition to their wage and salary jobs. When this is the case, earnings from second jobs can pull down average wages. To see if this is a sign of stress, look for other potential stress indictors in this profile: unemployment rates over time and changes in earnings per job. Proprietors' Share of Total (Income vs. Employment) In 2004, proprietors' share of total employment (27%) was higher than proprietors' income share of total (12%). From to 2004, proprietors' income share of total fell by 41.5%, while proprietors' employment share of total grew by 12.7%. Share of Total 30% 25% 20% 15% 10% 5% 0% 27% 12% How are Proprietors Doing? Employment Income From to 2004, average wage and salary disbursements fell at an annualized rate of 0.1% (adjusted for inflation), declining slower than from average nonfarm proprietors' income, which fell by 1.0%. In 2004, average wage and salary disbursements were $27,721 (adjusted for inflation), more than average nonfarm proprietors' income ($20,523). Thousands of 2004 $ ,721 20,523 In, it was the other way around. Average nonfarm proprietors' income was $28,822 (adjusted for inflation), the same as average wage and salary disbursements Average wage and salary disbursements 2003 If these shares vary widely, it suggests that proprietors and wage earners have different earnings. Average nonfarm proprietors' income Source: BEA REIS 2004 Table CA30 Demographic, Employment and Income Trends Page 9

14 Non-labor Income The term "Non-Labor Income" is also referred by some economists as "Non-Earnings Income". It consists of Dividends, Interest and Rent (collectively often referred to as money earned from investments) and Transfer Payments (payments from governments to individuals, age-related, including Medicare, disability insurance payments, and retirements). (See methods section for definitions and further explanations.) 45% Non-labor Income Share of Total Income In the last 34 years, nonlabor sources grew at an annual rate of 3.3%, outpacing labor sources which grew at a 1.7% rate. 36.5% of total personal income in 2004 was from non-labor sources. 47.0% of new income from to 2004 was from non-labor sources. Percent of Total Income 40% 35% 30% 25% 20% 15% 10% 5% 37% 0% Non-labor income under estimates retirement income because it does not include pensions (401Ks). Labor vs. Non-Labor All income in millions of 2004 dollars 2004 New % of % Chg % Chg % of % of % of Income New Ann. Rate Ann. Rate Total Total 2004 Total Income Total Personal Income 12, % 19, % 25, % 13, % 2.2% 2.7% Labor Sources 9,183 75% 12,095 62% 16,273 63% 7, % 1.7% 3.0% Non-Labor Sources 3,074 25% 7,514 38% 9,362 37% 6, % 3.3% 2.2% Dividends, interest, and rent 1,901 16% 4,260 22% 5,157 20% 3, % 3.0% 1.9% Personal current transfer receipts 1,173 10% 3,253 17% 4,206 16% 3, % 3.8% 2.6% Percentages do not add to 100 because of adjustments made by BEA, such as residence, social security, and others. Source: BEA REIS 2004 Table CA30 Page 10 Demographic, Employment and Income Trends

15 Transfer Payments Components of Transfer Payments All figures in millions of 2004 dollars % of Total TP 2004 % of Total TP New Payments to 2004 Total transfer payments 1, , ,032.3 % of New Payme nts Government payments to individuals 1, % 4, % 2, % Retirement & disab. insurance benefit payments % 1, % 1, % Medical payments % 1, % 1, % Income maintenance benefit payments ("welfare") % % % Unemployment insurance benefit payments % % % Veterans benefit payments % % % Federal educ. & trng. asst. pay. (excl. vets) % % % Other payments to individuals % % (2.3) NA Payments to nonprofit institutions * % % % Business payments to individuals % % % Age-related (Retirement, Disability & Medicare) % 2, % 1, % Change in Share of Total ( ) -20% 0% 20% 40% Trends in Non-Labor Income by Type The largest components of Non-Labor Income are from Dividends, Interest & Rent (i.e. money earned from past investments) Trends in Non Labor Income 5,157 In 2004 welfare represented 8.2% of transfer payments, and 1.3% of total personal income. This is up slightly from and up slightly from Billions of 2004 $ , Components of Transfer Payments In 2004, 58% of Transfer Payments were from agerelated sources (retirement, disability, insurance payments, and Medicare), while 8% was from welfare Dividends, Interest & Rent Age-related (Retirement, Disability & Medicare) Income Maintenance (Welfare) 2003 * See glossary for definitions. Source: BEA REIS 2004 Table CA35 Demographic, Employment and Income Trends Page 11

16 Personal Income How well do we recover from recessions? In the latest recovery (2001 to 2004), income growth in Montana (up 2.4%) has outpaced the United States. Alternatively, in the last recovery (1991 to 2001), the United States (up 2.9%) grew the fastest. Annual % Change (2004 $) 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% Income During Recent Recoveries - Annualized % Change from trough to following peak 3.3% 3.1% 2.9% 2.7% 2.4% 1.8% 1.4% 0.8% 2.4% 1.4% In the recovery from to 1990, the United States (up 3.3%) grew the fastest. 0.0% 1975 to to 1981 to to to 2004 Montana - Income United States - Income Income Growth Compared to the Nation Over the last 34 years income growth in Montana has been slower than the nation. Some areas can experience income gains even during the recessions. If so, check to see how much of the change is due to changes in earnings per job, employment, migration and population changes. Source: BEA REIS 2004 Table CA30 Income (2004 $ - Index =100) Income Compared to the State and Nation Recession Bars Montana United States Page 12 Demographic, Employment and Income Trends

17 Government Employment The majority of the growth in government employment has been in state and local government (105%). Thousands of Jobs Government Employment by Type 70,287 13,551 8, Federal, civilian Military State and local Is the size of government getting bigger? One way to answer this is to look at whether government employment has grown. If so, what type of government employment, and how does it compare to population growth? The figures on this page show government employment by type. Share of Total Jobs 25% 20% 15% 10% 5% Government Employment as a Share of Total 15% 0% Government Employees per 100 People Government Employment per 100 People Source: BEA REIS 2004 Table CA25 and CA25N Demographic, Employment and Income Trends Page 13

18 Earnings Per Job Average earnings per job, adjusted for inflation, have fallen from $32,746 in to $30,878 in In 2004, Average earnings per job in Montana ($30,878) were the sane as the state ($30,878) and lower than the nation ($44,503). How well do we recover from recessions? In the latest recovery (2001 to 2004), earnings per job growth in Montana (up 1.7%) have outpaced the United States. Alternatively, in the last recovery (1991 to 2001), the United States (up 1.2%) grew the fastest. In the recovery from to 1990, the United States (up 0.9%) grew the fastest. Total Wages Earned Average Earnings per Job = Total # of Workers Annual % Change (2004 $) Thousands of 2004 $ % 1.5% 1.0% 0.5% 0.0% -0.5% -1.0% -1.5% -2.0% -2.5% 1972 Earnings Per Job & Per Capita Income Recession Bars Per Capita Income Real Earnings Per Job -0.7% -0.4% Earnings Per Job -1.2% -0.7% 0.9% 0.2% % 1.2% 1.3% 30,878 27, % 1975 to to 1981 to to to 2004 Montana - Earnings Per Job United States - Earnings Per Job Reasons why earnings per job may change over time: 1) Average earnings per job statistics include full and part-time employment. In some counties only a portion of the eligible workforce works full-time, driving down wage statistics. Run an EPSC profile to see the percentage of people working full-time. 2) Communities with an increase in tourism may see a decline in earnings due to a rise in seasonal (part-time) workers. 3) Communities that have established themselves as regional retail trade centers may see a decline in wages due to the low wages paid in retail trade. 4) Structural changes may have resulted in the loss of relatively high-wage occupations. Look at the long-term trends in employment, by industry, and compare to the nation and other counties. Are the changes local, or part of nation-wide trends? 5) More women have entered the workforce, and because of relatively lower pay, or because of fewer hours worked (depending on the region both may occur), earnings may decline over time. For a comparison of male versus female income run an EPSC profile. 6) 7) Earnings will decline if job growth is primarily from low-wage services industries. Look at the breakdown of different industrial sectors to see the type of service industries that are growing. Does the community have what it takes (education, airports, amenities, etc.) to attract the high-wage service industries (engineering, finance, etc.)? People may be choosing to live in some communities for quality of life reasons. In some areas the increase in population can outpace the rate of job creation, thereby flooding the labor market and causing a downturn in wages. Look at the growth rates of population relative to growth in jobs and personal income. Source: BEA REIS 2004 Table CA30 Page 14 Demographic, Employment and Income Trends

19 Per Capita Income Total Personal Income PCI = Population Per capita income is often used as a measure of economic performance, but it should be combined with changes in earnings for a realistic picture of economic health: Since total personal income includes income from 401(k) plans as well as other non-labor income sources like transfer payment, dividends, and rent, it is possible for per capita income to rise, even if the average wage per job declines over time. In other words, the non-labor sources of income can cause per capita income to rise, even if people are earning less per job. Per Capita Income Per capita income, adjusted for inflation, has risen from $17,580 in to $27,657 in In 2004, per capita income in Montana ($27,657) was the sane as the state ($27,657) and lower than the nation ($33,050). Thousands of 2004 $ Recession Bars Montana ,657 How well do we recover from recessions? In the latest recovery (2001 to 2004), per capita income growth in Montana (up 1.7%) has outpaced the United States. Alternatively, in the last recovery (1991 to 2001), the United States (up 1.7%) grew the fastest. Annual % Change (2004 $) 2.5% 2.0% 1.5% 1.0% 0.5% 0.4% 1.4% Per Capita Income 2.4% 2.2% 0.9% 0.8% 1.7% 1.5% 1.7% 0.4% In the recovery from to 1990, the United States (up 2.4%) grew the fastest. 0.0% 1975 to to 1981 to to to 2004 Montana - Per Capita Income United States - Per Capita Income Source: BEA REIS 2004 Table CA30 Demographic, Employment and Income Trends Page 15

20 Firms by Industry (SIC) The advantage of this data source is that it never has disclosure restrictions. This source also releases data for hundreds of sectors (available on demand). The data on this page are from the US Census County Business Patterns, which unlike the REIS data, does NOT include proprietors, government, household services or railroad workers. If available, we encourage you to look at employment and income data from BEA REIS starting on page 26 as well. Growth The employment category whose share of total gained the most was services, which went from 27.1% in 1977 to 35.1% in Decline The category whose share of total shrank the most was retail trade, which went from 30.4% in 1977 to 24.6% in County Business Patterns Number of Establishments This page is blank because the system does not contain 8.0County Business Patterns data for this geography. Thousands of Firms A blank version of this page will be inserted when you print Services Retail Trade Construction Finance, Ins., & R. Estate Wholesale Trade Trans., Comm., & Util. Manufacturing Agricultural Services Mining Nonclassifiable Firms by Industry New Firms 1977 Shr of Tot 1987 Shr of Tot 1997 Shr of Tot Shr of Tot Total Agricultural Services % % % % Mining % % % % Construction % % % % Manufacturing % % % % Trans., Comm., & Util % % % % Wholesale Trade % % % % Retail Trade % % % % Finance, Ins., & R. Estate % % % % Services % % % % Nonclassifiable % % % -100 NA Change in Share of Total -10% 0% 10% Data ends in 1997 because the CBP switched to a different classification system (NAICS) in Source: Census County Business Patterns Page 16 Demographic, Employment and Income Trends

21 Firms by Industry in 2004 (NAICS) Firms by Industry in 2004 Auxiliaries (exc corp., subsid. & reg. mgt) Management of companies & enterprises Unclassified establishments Utilities Educational This services page is blank because the system does not Mining Forestry, fishing, hunting, and agriculture contain support County Business Patterns data for this geography. A Information blank version of this page will be inserted when you print. Arts, entertainment & recreation Transportation & warehousing Manufacturing Admin, support, waste mgt, remed. Serv. Wholesale trade Real estate & rental & leasing Finance & insurance Other services (except public administration) Professional, scientific & technical services Health care and social assistance Accommodation & food services Construction Retail trade Thousands of Firms Firms by size and industry in 2004 Number of Employees per Firm Total or more Forestry, fishing, hunting, and agriculture s Mining Utilities Construction , Manufacturing Wholesale trade Retail trade ,415 1, Transportation & warehousing Information Finance & insurance , Real estate & rental & leasing , Professional, scientific & technical services , Management of companies & enterprises Admin, support, waste mgt, remed. Serv Educational services Health care and social assistance , Arts, entertainment & recreation Accommodation & food services , Other services (except public administratio , Auxiliaries (exc corp., subsid. & reg. mgt) Unclassified establishments Total ,869 6,592 3,972 2, Source: Census County Business Patterns Demographic, Employment and Income Trends Page 17

22 Firms by Size Firms by Size The size category that grew the most was 1-4 employees. 100% County Business Patterns Number of Establishments Share of total 1000 or more employees employees As a share of total, the size category that gained the most was employees. Share of Total 80% 60% employees This page is blank because the system does not 40% contain County Business Patterns data for this geography employees In 2004, 91% of firms A blank version of this page will be inserted when you print. had fewer than employees employees. 20% 5-9 employees Number of Employees per Firm 1000 or more Share of Total % Change in Share (-2004) employees employees 1-4 employees Change in Firms (-2004) % 20% 40% 60% 80% -1% -1% 0% 1% Source: Census County Business Patterns Page 18 Demographic, Employment and Income Trends

23 Unemployment Trends Annual Average Unemployment Rate Compared to the Nation 8 Unemployment Rate This 5 page is blank because the system does not In 2005, the contain unemployment data for this geography. unemployment rate was 4 A blank version of this page will be inserted when you print. 4.0%, compared to 5.1% in the nation. 3 Percent 7 6 Unemployment Rate Seasonality Montana United States Unemployment Rate Seasonality This graph illustrates the seasonal variation in the unemployment rate over the last three years. In 2005, the unemployment rate varied from from a low of 3.1% in September 2005 to a high of 5.2% in February 2005 Percent Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: Bureau of Labor Statistics Demographic, Employment and Income Trends Page 19

24 Commuting This page is blank because the system does not contain commuting data for this geography. Page 20 Demographic, Employment and Income Trends

25 Agriculture (Business Income) Farm income figures presented on this page reflect income from farming enterprises (income of the business). The term farm includes farming and ranching, but not agricultural services such as soil preparation services and veterinary services. In contrast, farm income figures presented in the next section reflect personal income earned by individuals (income of individuals, both proprietors and wage and salary employees) who work in farming and ranching. Farm income of businesses differs from individual farm income because it also includes government payments, rent, the value of inventory change and production expenses. In some areas, net farm income can be negative when production expenses exceed gross income. Gross Income, Expenses, and Net Income from Farming and Ranching All figures in thousands of 2004 dollars % of Gross Income % of Gross Income 2004 Gross Income (Cash + Other) 3,975,985 3,005,834 2,646,709 % of Gross Change in Income Share Cash Receipts from Marketings 3,482,756 88% 2,558,259 85% 2,165, % -6% Livestock & Products 2,195,529 55% 1,214,893 40% 1,323, % -5% Crops 1,287,227 32% 1,343,366 45% 841, % -1% Other Income 493,229 12% 447,574 15% 481, % 6% Government Payments 415,585 10% 326,487 11% 282, % 0% Imputed Rent & Rent Received 77,644 2% 121,087 4% 199, % 6% Production Expenses 2,829,211 2,566,553 2,272,322 Realized Net Income (Income - Expenses) 1,146, , ,387 Value of Inventory Change 66,524 2% (62,967) -2% 30, % -1% Total Net Income (Inc. corporate farms) 1,213, , ,995 Gross Income vs. Production Expenses Net Farm Income Gross Income vs. Production Expenses Net Farm Income Billions of 2004 $ Gross income Source: BEA REIS 2004 CD Table CA Production expenses Billions of 2004 $ Demographic, Employment and Income Trends Page 21

26 Relative Performance Comparisons In the following pages (23-25) you will learn about: 1. The economic diversity of the county, compared to the state and the nation. 2. The year to year stability of personal income growth, comparing the county to the state and the nation. 3. The stability of personal income over time, comparing labor versus non-labor income. 4. If this is a county profile, numerous performance characteristics of the county (population growth, employment growth, employment stability, etc.), are used to compare the county to the median county in the country (a benchmark ). Page 22 Relative Performance Comparisons

27 Employment Diversity Index One measure of economic success is economic diversity, or the lack of specialization. States that are heavily reliant on only a few industries are economically vulnerable to disruptions. This page documents one measure of specialization based on employment data from the Census. In the following table, the higher values of the index (low rank) indicate a higher level of specialization. State Colorado Wyoming Florida Arizona New Mexico California Texas Louisiana Montana Alaska Virginia Washington Maryland Oklahoma New Jersey Utah Hawaii Ranked from most diverse to most specialized (Montana is ranked 44). Special Rank State Special Rank State Special Rank Nebraska Pennsylvania North Dakota Maine Idaho Vermont New York Kentucky South Dakota Iowa Georgia District of Columbia Oregon Mississippi Nevada Alabama Delaware Rhode Island Missouri Tennessee West Virginia South Carolina Illinois New Hampshire Kansas North Carolina Puerto Rico Arkansas Massachusetts Ohio Connecticut Wisconsin 1, Minnesota Michigan 1,038 2 Indiana 1,042 1 The above table illustrates how this state compares to all of the other states in the nation. The chart to the right illustrates the data on which the index is based - employment share of total from the Census. There are more timely breakouts by industry from a different data source later in the profile. Employment Share of Total ( Census) Agriculture, forestry, fishing and hunting Mining Construction Manufacturing Wholesale trade Retail trade Transportation and warehousing Utilities Information Finance and insurance Real estate and rental and leasing Professional, scientific, and technical services Management of companies and enterprises Admin & support & waste management services Educational services Health care and social assistance Arts, entertainment, and recreation Accommodation and food services Other services (except public administration) Public administration Montana 0% 2% 4% 6% 8% 10% 12% 14% 16% Share of Total United States Source: Census SF3 Table P49. Relative Performance Comparisons Page 23

28 Stability Stability vs. State and Nation Different regions can behave very differently during recessions and recoveries. Note: Below 0% means absolute decline. Above 0% means absolute growth, but at different rates. Percent Change from the Previous Year (2004$) 14% 12% 10% 8% 6% 4% 2% 0% -2% -4% Labor vs. Non-Labor Income Stability 1972 Personal Income Recession Bars Montana United States 4% 3% 20% Non-labor vs. Labor Income Non-labor income sources can have a stabilizing effect on the economy and are sometimes, but not always, counter-cyclical to labor income. Percent Change from the Previous Year (2004 $) Source: BEA REIS 2004 Table CA30 15% 10% 5% 0% -5% -10% Recession Bars Non-labor Income Labor Income 5% 2% Page 24 Relative Performance Comparisons

29 Performance Comparisons This page is blank because the system does not contain data for this geography. Relative Performance Comparisons Page 25

30 Employment and Income by Industry In the following pages (28-31) you will learn about: 1. Long-term employment and personal income trends, from to How the structure of the economy has changed during the last three decades Information for some industries and for some years may not be available from the U.S. Department of Commerce because of disclosure restrictions. What is a disclosure restriction? A disclosure restriction means a gap exists in the data. Information has been suppressed by the U.S. Department of Commerce to avoid disclosure of confidential information. Generally, the smaller the geographic level of analysis and the smaller the population of the county, the higher the chances that industry-specific information is suppressed and that disclosure restrictions will occur. Our model to estimate the disclosure restrictions currently provides estimates for employment and income using the SIC classification method through for the western states only. Page 26 Employment and Personal Income by Industry

31 Read This First Important Notes on the Industrial Classification Systems used by EPS The U.S. Department of Commerce made a transition in how economic information is gathered and organized in The Standard Industrial Classification System (SIC) was used from to ; the North American Industrial Classification System (NAICS, pronounced nakes ) is used currently, for data from 2001 and beyond. Unfortunately the two systems are not backward comparable, so they are presented separately in EPS: to data are organized by SIC, and data beyond those years are organized by NAICS. The most important change resulting from the shift to NAICS is the recognition of hundreds of new businesses in today s economy. NAICS divides the economy into 20 broad sectors rather than the SIC s 10 divisions. This is especially helpful in giving a more detailed breakdown of the fastest growth area in the country s economy services. For example, advanced technology related service industries (e.g., professional, scientific and technical services) are clearly differentiated from in-person services (e.g., health care) and low-wage services (e.g., accommodation and food services). For historical data (-, organized by SIC) EPS was designed to illustrate the complexity of the service economy in a couple of ways: 1) We use the term "Services and Professional" to underscore an important point: service occupations are not just hamburger flippers and maids, but rather consist of a combination of high-paying and low-paying professions, mixing physicians with barbers, and chambermaids with architects and financial consultants. 2) We reorganized the SIC categories into different types of services, such as Consumer Services, Producer Services, Social Services, and Government Services. The transition to NAICS has alleviated the need to explain that services are actually a wide mix of low, medium, and high-wage industries. About Missing Data This profile is organized so that all non-disclosed information is presented first. Employment and personal income by industry is presented last. For some rural counties, and for some industries, data gaps may occur. EPS has a built-in system for estimating data gaps through for the 11 contiguous western states (AZ, CA, CO, ID, MT, NM, NV, OR, UT, WA, WY). When estimates are used in the tables on pages 28 and 30, they are highlighted in bold red text. Employment and Personal Income by Industry Page 27

32 Employment (SIC) Data ends in because the BEA switched to a different classification system (NAICS) in Growth The employment category whose share of total gained the most was services and professional, which went from 50.3% in to 63.7% in. Decline The category whose share of total shrank the most was farm, which went from 12.3% in to 5.8% in. Thousands of Jobs Employment History (by SIC) Lines without markers are estimates Services and Professional Government and government enterprises Farm and Agricultural Services Construction Manufacturing Mining Employment by Industry Changes from to % of Total % of Total Total Employment 301, , ,004.0 % of New Employ ment Wage and Salary Employment 230, % 413, % 183, % Proprietors' Employment 70, % 145, % 74, % Farm and Agricultural Services 39, % 43, % 3, % Farm 37, % 32, % (4,429.0) NA Ag. Services 2, % 10, % 8, % Mining 7, % 6, % (767.0) NA Manufacturing (incl. forest products) 25, % 29, % 3, % Services and Professional 151, % 356, % 204, % Transportation & Public Utilities 18, % 27, % 8, % Wholesale Trade 10, % 20, % 9, % Retail Trade 49, % 104, % 54, % Finance, Insurance & Real Estate 18, % 37, % 18, % Services (Health, Legal, Business, Others) 53, % 165, % 112, % Construction 15, % 34, % 19, % Government 62, % 89, % 26, % * Estimates for data that were not disclosed are bold and red in the above table. New Employment -5.0K 300.0K * Agricultural Services include soil preparation services, crop services, etc. It also includes forestry services, such as reforestation services, and fishing, hunting and trapping. Manufacturing includes paper, lumber and wood products manufacturing. Source: BEA REIS 2004 CD Table CA25 Change in Share -7% 20% Page 28 Employment and Personal Income by Industry