In a comparison of communities within a 500 mile radius, Billings remains the third largest economy, according to a recent report released by Big Sky Economic Development.
In terms of wealth generation or economic output, Billings actually outperforms many communities with similar populations, according the report, called The Economic Pulse. With annual production (Gross Domestic Product or GDP) of $9.76 billion, Billings (population 168,283) outpaces Rapid City, South Dakota, (144,134) by more than $3 billion.
While Billings stands well among the competition, the study identified areas of concern. Several communities are outpacing Billings in population growth by 2-3 percent, and 25 percent of the Billings workforce is aged 55 to 74, which means a fourth of the workforce in Billings will retire in ten years. The retirements mean that the community will have to replace or fill 15,500 in the next five years.
Billings, also, lags behind peer communities in bachelor-educated adults and has the third lowest number of students enrolled in higher education.
The Economic Pulse compared Billings to Boise, Fort Collins, Casper, Bismarck, Rapid City, Cheyenne, Bozeman, Great Falls, and Missoula.
Only Boise (population 676,909) and Fort Collins (population 333,577) had higher GDP or higher total personal income, which is another measure of economic growth. Total personal income for Billings in 2015 (most recent figures available) was $7.25 billion. Boise bumps up to $20 billion and Fort Collins to about $15 billion.
Billings’ rate of GDP growth remains steady, while the rates for many communities around it fluctuate greatly. So while Billings’ rate of growth increased, 3.1 percent in 2016 – slower than most of the other communities and the national average, Fort Collins’ rate of growth increased by 6 percent and Casper’s dropped by 13.7 percent.
Billings personal income grew 3.5 percent in 2015 over the previous year, which is similar to its GDP growth of 3.1 percent. Bozeman’s total personal income grew 7.2 percent, which moved it up in the ranking over past studies, overtaking Missoula.
Billings’ population grows on average approximately 1.25% per year. From 2006 to 2015, its population grew 12.4 percent. Steady growth is a healthy trend when many communities in the country are losing population annually, said the study.
From 2014 - 2015 Bozeman experienced a 3.5% increase in population, while Bismarck and Fort Collins were 2.5% and 2.9%, respectively. Over the last ten years, Billings is close to the middle of the pack, and is outpacing the nation nearly two fold.
Billings exceeds the national average and that of peer population communities as to the number of people having a high school diploma or equivalency as the highest level of attainment. Naturally, communities with universities of more than 10,000 students show more residents with bachelor’s degrees or higher. With a total cumulative student population enrolled in higher education in Billings at approximately 5,500 there is definitely room to grow in order to compete regionally, said the study.
When breaking employment down by age group, Billings and its peer cities follow relatively similar trends. Bozeman and Missoula have the largest share of young people working with Fort Collins and Boise close behind. This is not surprising as they are all home to large higher education institutions. Billings has one of the oldest workforces, with 25% of the workforce falling into the 55 to 75+ year old age group. This means a quarter of the Billings workforce will reach/ exceed retirement age in the next 10 years.
While having a diverse economy is a hallmark of a strong economy, most of the communities were similar in their level of diversity.
Billings currently has an unemployment rate of about 4.1 percent. The unemployment rates in Billings and its peer cities have followed consistent trends since 2002. The exceptions are Boise, which peaked at nearly ten percent during the recession, and Bismarck, whose unemployment rate has remained below four percent. The major difference between last year’s report and this year’s is that Bozeman now has a lower unemployment rate than Billings with Missoula’s number now equal to Billings.
Billings unemployment rate peaked at 5.9 percent in 2010. Its lowest point was 2.7 percent in 2007.
Another measure of economic strength is the Employment to Population Ratio (EPOP). It is a measure of the percent of the civilian, non-institutionalized population, aged 18-64 that is employed. Unlike the labor force participation rate, it does not exclude discouraged workers and other long-term unemployed persons.
EPOP is very similar to participation rate as it compares the number of employed to the working age population. With almost 89,000 people employed, Billings’ EPOP is 4,000 over 2010, or 81.5 percent of the working age. Billings’ EPOP is in the top portion of its peer cities and has been relatively consistent. Bismarck has the highest EPOP of the peer cities. Bozeman has moved up several spots over the last reporting year and now surpasses Billings; though Billings has surpassed Rapid City and Casper. Boise had the lowest EPOP of the peer communities, with its ratio steadily improving along with its economy.
So when it comes to real median household income, how does Billings compare? Year over year Billings has remained in a similar position compared to the entire group of peer cities. However, Bozeman has, in the last study year, gone from $1,000 behind Billings to $4,000 ahead of Billings. Boise and Billings have very similar numbers – the variability is relatively nominal, but this year it placed Billings ahead of Boise; whereas, last year Boise ranked higher. Income data can be viewed in two ways, a lower median household income can make a community more attractive to business, but potentially less attractive to talent/workforce, noted the study.
Another measure of a community’s economic health is called the Gini Coefficient – simply put a comparison of the have and the have not’s – how evenly is total income disbursed among the people of a community. Billings’ coefficient of .439 “suggests a relatively equitable community equity.”
Housing affordability is close to being the same for almost all the communities, but Billings is in the middle of the pack with average monthly housing cost at $1,097.
Billings’ cost of living is 2.5% below the national average at 97.4 percent, and below that of most of the other communities in the study. Only Rapid City has a lower cost of living and Fort Collins has the highest, which is 23 percent higher than the national average. Montana’s average is just a tad over the national average, while Bozeman’s and Missoula’s is five to ten points higher than that.