What a difference a year makes.

"2008 was quite a year," Paul Polzin told the Kalispell crowd gathered Tuesday for the University of Montana Bureau of Business and Economic Research's annual Economic Outlook Seminar. "Things are very different now than they were."

Polzin, former bureau director and now a research associate and professor emeritus of business at the university, was one of several economists painting just how different the 2009 picture is from 2008.

They represented Montana's major business sectors - agriculture, forest products and manufacturing, tourism, health care, housing - and were linked by an assessment from the Western Transportation Institute at Montana State University.

A year ago, Polzin reminded the group, researchers figured that Montana's near lack of automotive and financial services industries, President Bush's stimulus package and the probability that China and other developing nations would dodge fallout from the U.S. downturn would buffer the state from anything more than a short, mild recession.

"We thought this would be the third U.S. recession in a row that Montana would miss," he said. Flathead County was not so lucky, as it felt the recessions of 1990 and 2001 when businesses such as Semitool Inc. and Columbia Falls Aluminum Co. took hits.

But the bureau's July update toned down the optimism, balancing Montana's early nosedive in construction and real estate with record wheat prices.

"Then came September. The world starts to fall apart," he said. Wall Street tanked, commodity prices plummeted, the recession spread to the European Union and Japan and Montanans got their first news of layoffs outside the timber industry.

December followed with its disastrous Christmas shopping season, free-falling commodity and energy prices, mining and manufacturing layoffs, and "it was obvious this recession was not going to bypass Montana," Polzin said.

He said this recession ranks in Montana's historical middle, worse than those of 1990 and 2001 but better than the Great Depression.

Montana's unemployment should max out in the 9 percent range, he said, with the economic slide bottoming out in July 2009 and clearing up sometime in 2010. The most recent statewide unemployment rate (in December) stood at 5.4 percent; Flathead County's was 8.7 percent.

The $800 billion to $900 billion in President Obama's economic stimulus plan is about 5 percent of the nation's gross domestic product, about where it needs to be to have a real impact, Polzin said.

"It will increase the deficit," Polzin conceded, "but the risks of that are less than not doing anything They will deal with the deficit later in its own context."

Polzin is keeping an eye on several indicators now:

Will announced layoffs outside the timber industry actually take place? What will happen in the construction and real estate industry? Will nonresident travel continue to back off? Will mining stay strong? Wood products need life support, but will other manufacturers continue their decline? Will strong wheat prices continue to balance out weak cattle markets? Will Montana's all-time low consumer confidence affect retail trade?

The bureau's December forecast for 0.5 percent statewide economic growth in 2009 could go negative, he said. Polzin now figures the economy could shrink by 0.5 percent or even 1 percent.

"For Montana, 2009 is probably going to be the worst year since 1988," he said.

But it's not all bad.

In the last 15 days copper and platinum prices soared and boosted prospects at Stillwater Mining, the nation's only producer of palladium and platinum. It's risky to rely on short-term data, but even after a recent drop in prices they still were at 2006 levels, which were then an all-time high.

And when the global picture begins to round the bend and developing nations gear back up on their manufacturing, Montana can capture the benefits buy supplying the energy and natural-resource commodities.

Reporter Nancy Kimball can be reached at 758-4483 or by e-mail at nkimball@dailyinterlake.com