Sanders County economic trends

Many of the trends that people have been commenting about in Sanders County have been confirmed by a recent social-economic study. It also points out some errors in popular thought. The study by Headwaters Economics an independent, nonprofit research group independent group of Bozeman reports on statistics of Sanders County and makes some prediction.

One trend that was pretty much known is how important small proprietors are. 40.5% of the jobs and 44.5% of new employment of Sanders County comes from proprietors. Wages and salaries provide 59.5% of the jobs. However, wages and salary jobs provided 70% of the income from labor. The average non-farm proprietor income was $13,800. Many of the proprietor have a tough time making it. Proprietor refers to employment and income from sole proprietorships, partnerships, and tax-exempt cooperatives.

Another trend that was pretty much known was that 49% of the income for the county was from non-labor sources, 19% was from dividends, interest, and rent and 30% was from governments to individuals such as Social Security, Medicare, and unemployment compensation. Welfare accounted for only 3.5% of the income of the county. Much of the non-labor income is from the many people that have retired in and into the county.

A third trend is the aging of the population. The biggest growth was in the 50-55 age group. One reason is that the baby boomers are moving along in the population. Another reason is that some of the retirees coming into the county are getting early retirements from corporations, fire and police departments, or are selling their businesses.

The implications for business development are many. First, with nearly half of the income of the county coming from non-labor, the labor pool is small. Though our 12.2 percent unemployment rate should not be disregarded, the impact on the community is perhaps lower than thought. If nearly half of the income is from non-labor sources, then the impact is more like having a 6-7 percent unemployment rate. Secondly, what has been discussed about the labor pool is true. With so many people receiving non-labor income, the number of people seeking work is low.

The biggest implication for business is the type of businesses needed for the county. The biggest growth is in the service and retail industries. Entrepreneurs should look into the needs of this older population and try to create ways to tap that market.

Another figure shows why the county has high unemployment. 70% of the firms of the county were engaged in construction in one way or another. For ten or more years, the home building market was excellent in the county. Since the fall of the housing market, many of the jobs from construction fell. Many of the construction workers have had to find jobs in other industries or move from the county.

One error in public thought is that many people say that government is getting bigger. Employment trends show that in 1982 government employment accounted for over 8 employees per 100 population; whereas, in 2006 the ratio was 7 per 100 population. That figure was the lowest in over 25 years. The percentage of the jobs was 13% of the workforce which was also the lowest in 25 years.

Of the 380 firms in Sanders County in 2005, 37 firms hired 10-19 workers, and only 18 hired more than 20. Sanders County has long been a place of small companies and will more than likely stay that way. Efforts to assist the economy of Sanders County should concentrate in this area.

For the complete study, please contact the office of Sanders County Community Development Corp. at 827-9896