Flathead County continues a slow climb out of recession and is seeing some upticks in the local economy that could brighten in 2013.

“I’m optimistic about this coming year,” said Brad Eldredge, director of institutional research assessment and planning at Flathead Valley Community College. “I think a lot of the headwinds we’ve been up against, I think we’re getting past them.”

That was one perspective at the Flathead Economic Forecast forum that Montana West Economic Development held Wednesday at the college.

Commercial, industrial and residential property sales and prices are firming and inching back up and there are fewer bank-owned properties on the market, according to data presented by local appraisers.

“Signs of a local recovery are evident,” said Barbra Bennett of Bennett Appraisal Services.

December unemployment in the Flathead, still high at a not seasonally adjusted 9.1 percent, is down from 10.4 percent one year ago.

From quarter two of 2011 to quarter two of 2012, construction employment in the Flathead grew by almost 100 jobs, Eldredge said. “Last year I said I don’t know when we’ll ever find bottom in construction employment. So it’s up, no longer a net negative. That’s really positive for the Flathead Valley.”

In that same time, non-wood products manufacturing employment in the Flathead grew by about 11.6 percent and added almost $4 million of new wages to the local economy. That sector includes the Flathead’s burgeoning firearms cluster.

“Although we don’t have the kind of concentration other places do, we are producing things sold all over the world. It’s been a very strong sector,” Eldredge said.

The biggest job gains in the Flathead have been in health care and social services, driven by demographics changes and a push to grow from a local to regional industry. Some of the biggest losses have been in government and administrative services. The latter is a sector that includes temporary employment agencies, which may be falling as people find permanent positions in the work force, Eldredge said.

BUOYED BY high household incomes, low unemployment and a strong loonie, Canadians continue to contribute heavily to the Flathead economy. That includes the real estate market.

An examination of property sales by Donna Townley, an economics instructor at University of Lethbridge, found record property sales in the Flathead in 2005 and then-record sales to Canadians, who made up about 1.2 percent of total sales that year.

Sales to Canadians continued to grow.

Townley found they hit nearly 10 percent of total property sales in the Flathead in 2010 and 2011 before falling to about 5.5 percent in 2012, said Kim Morisaki, special projects manager at Montana West Economic Development.

“She’s basically saying the Canadian dollar is going to continue being strong, the Canadian economy will continue being strong, and even with housing prices starting to go back up, she’s predicting they will continue to buy, even though it might not be as large of a percentage as it was in 2010 and 2011,” Morisaki said.

THINGS ARE looking better abroad.

The Bakken oil fields now are estimated to have 3.7 billion barrels of proven reserves, a figure that may be revised upward again. North Dakota now produces more oil than Alaska and is second only to Texas in domestic production.

It’s an energy boom that should last because of the large reserves, Eldredge said.

While the oil field is hundreds of miles away from the Flathead, it has provided a major opportunity for local unemployed workers to go and earn money, much of which ends up back here.

Farther abroad, the European Union shows signs of finally improving after months of political crisis. Borrowing costs are falling for some of the most troubled countries and debt spreads are closing between them and creditor nations.

“Hopefully they’re more out of the woods than they were,” Eldredge said, adding that collapse of the euro would have caused global financial chaos.

Economic Modeling Specialists International predicts 2 percent job growth in the Flathead this year and the Bureau of Business and Economic Research at University of Montana predicts 1.9 percent growth in non-farm earnings in the Flathead, Eldredge said.

“I’m more of an optimist. I project 2.5 percent job growth in 2013,” he said. “That’s based on nothing more than my gut feeling and the opinions of these really smart people.”

One of the major unresolved headwinds clouding forecasts is the United States Congress, which continues to fight over debt ceilings, fiscal cliffs and sequestration.

“I’m optimistic as long as Congress doesn’t screw it up,” Eldredge said about the local economy. “If cooler heads prevail and there is some reasonable policy made that won’t short-circuit the economy, I’m pretty optimistic.”

KELLIE DANIELSON, president of Montana West Economic Development, said it looks like the Flathead’s economy will remain stable and continue to see growth of about 3 percent or less over the next few years.

“We believe things are getting better, but don’t think we’ll see the heyday of the big construction and employment boom. We believe we’ll continue to see some growth, but we’re not going to see the graphs shoot straight up,” she said.

Presentations from the Flathead Economic Forecast are available online:

http://dobusinessinmontana.com/home/flathead-forecast/

Reporter Tom Lotshaw may be reached at 758-4483 or by email at tlotshaw@dailyinterlake.com.