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Montana: Alternative Energy Bolsters Economy as Forest Products Falter

Mary Lou Byrd (Oct/Nov 09)
Montana has held against the economic storm better than many states, recording a 6.7 percent unemployment rate in July 2009. While they still wait for signs of stabilization, officials in the state continue to study areas for business expansion in the future.

"Like the national economy, the Montana economy is showing mixed signs of recovery," says Labor Commissioner Keith Kelly. "Compared to the significant financial and economic downturn this past winter, the mixed signals can be seen as a blessing. However, we are eagerly awaiting clear indications of job stability and an economic recovery." According to the National Conference of State Legislatures, Montana is one of two states that stands out for relying 100 percent on budget cuts to eliminate its budget gap.

One recent business success, according to the Montana Department of Commerce, is Stinger Welding's 105,000-square-foot manufacturing facility in Libby. The bridge and expansion joint fabricator plans to employ about 200 people at its first Montana operation. The company received $5.7 million in commerce funds from the state, which included a $1 million work force training grant.

One industry in the state that did post gains was forest products, but unfortunately it was due in part to an abysmal first quarter. During the second quarter of 2009, the industry saw increases in employment, wages, and production. But these indicators remain at very depressed levels, according to Todd Morgan, director of forestry industry research at the University of Montana. While lumber production increased 33 percent between the first and second quarters, the first quarter was the lowest in more than five decades. And, Morgan says, lumber production is still off by 35 percent from a year ago. "Housing has not yet recovered enough to significantly increase the demand for lumber and other wood products, and the outlook for the remainder of the year does not show much improvement," he says.

In response to the recession's effects on the state's wood products industry, the Montana Legislature approved the Montana Distressed Wood Products Industry Recovery & Stabilization (WIPRS) loan funds through the Montana Reinvestment Act (HB645) to help businesses in this industry retain or create jobs. Two companies that recently were presented with WPIRS loans were Pyramid Mountain Lumber, which received $2 million and will create 36 new jobs and retain 105 current jobs; and Kelly Logging, which received $1 million and will retain 44 jobs and create 10 new jobs.

Addressing both timber jobs and the state's energy future, a study conducted by the Bureau of Business and Economic Research at the University of Montana revealed a substantial supply of biomass to meet existing utilization demands and possibly more. "Biomass is one more leg under the table of our energy future." says Governor Brian Schweitzer, ".we can help to ensure the viability of timber jobs in an industry that is very important to both western Montana communities and forest health alike."

Another study recently released focuses on energy jobs for the state. The Montana Department of Labor and Industry released a report that details the education and training needed for the work force to support the energy industry here. "Montana's energy industry is continuing to grow, adding new sources of energy and the necessary infrastructure to deliver power to our customers," says Kelly. "In continuing this growth, our most precious resource is our work force, and we need to make sure our workers have the tools they need for new energy industry jobs on the horizon."

The Montana Department of Commerce also slated $2.5 million in grant funding for private nonprofit research companies involved in biomedical research. "Encouraging growth in our already successful research industry is good for our college graduates, our job market and our economy," says Anthony Preite, the department's director. "These funds will foster continued development in our growing technology sector and allow Montana to remain competitive in the world of bio-research."

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