The economies of Flathead County, Montana and the United States are recovering, albeit slowly, an economist told several hundred people at Friday’s economic outlook seminar in Kalispell.

Patrick Barkey, director of the Bureau of Business and Economic Research at the University of Montana, said 2011 will be the year “when we see some improvement” in the economy.

That growth in Montana should be meaningful, he said. Several of Montana’s largest counties have reflected economic growth, which contributes to overall growth for the state, he said.

“Companies in the U.S. are making a lot of money. Profits are big and they’re starting to show signs of spending,” he said.

Consumer spending also is happening, he said, but still at levels lower than people spent before the recession.

In Montana, the best illustrator of the recession has been employment, Barkey said.

The recession was deep and extended and while the economy is showing signs of improvement, “jobs are the last to come back” in any economic recovery, he said.

One of the best indicators that Montana’s underlying economy is coming back is that the dollar amount of withholding taxes that businesses must send to Helena is increasing. That means people are making money, Barkey said.

Montana’s wage and salary disbursements reached a low point in 2009, Barkey said, but in the first half of 2010 those numbers returned to 2007 levels. However, he pointed out, numbers didn’t bounce back in every industry. For example, construction wages still are down 25 percent compared to 2007 and total manufacturing salaries are lower than five years ago.

Conversely, public administration, which reflects most government salaries, grew by 20 percent when 2010 is compared to 2007, mostly because of census workers and stimulus programs. That growth wasn’t necessarily bad, Barkey said.

The recession hit the Flathead economy harder than any other major urban area in the state, Barkey and fellow economist Paul Polzin said. Polzin is director emeritus of the economic research bureau.

Non-farm labor income in Flathead County dropped by 2.7 percent in 2008 and by 9.3 percent in 2009 before rebounding slightly last year when a .2 percent increase was recorded. Projected growth in that category this year and in 2012 is 2.5 percent, followed by a forecast 2.3 percent in 2013 and 2.4 percent in 2014.

Overall, Flathead County’s economy today is smaller than it was when the recession began, Polzin said.

“It will take several years of growth to get back to where we were,” Polzin said, because the epicenter of the economic decline in Montana occurred in Flathead County.

The wood products industry has fallen from its historic spot as the basic industry in Flathead County that employed the greatest percentage of workers. It still accounts for 18 percent of all employment in the county, but ranks second to nonresident travel, which employs 20 percent of workers in the county.

The federal government employs 16 percent of the local work force, followed by 16 percent in the “other manufacturing” category, 8 percent in the “agriculture and other” category, 8 percent in the service industry, 7 percent in transportation, 5 percent in retail and 2 percent in the metals industry.

Polzin predicted the wood products industry is at its bottom point. He said the nonresident travel sector of the county’s economy should grow slowly, as is the case for transportation. There should be some growth in the manufacturing industry, too, he said.

The thing about forecasting, Barkey said, is “we’re always wrong.” But, the general difference between the outlook for 2011, compared to 2010, is it’s more balanced, he said.

With their generally optimistic forecast for 2011, Barkey and his team are worried they may be too optimistic, he said, “but we could be too pessimistic and growth could be big.”

Reporter Shelley Ridenour may be reached at 758-4439 or by e-mail at sridenour@dailyinterlake.com.