Outdoor industry claims strong place in Montana’s economy

By: 
The Associated Press

Montana’s outdoor economy generates more money than almost any other sector except real estate and government, according to a new report by the Outdoor Industry Association.

Activities like camping, fishing, motorcycle riding and water sports generate $7.1 billion in consumer spending annually, according to the report. That includes $2.2 billion in wages and salaries from 71,000 direct jobs, and $286 million in state and local taxes.

“Even if that’s off a bit, it’s still showing the outdoor industry is a big part of Montana’s economy,” said Chris Mehl of the nonpartisan research firm Headwaters Economics. “If you think of Montana’s economy like a house, the foundation of timber, agriculture, and mining has expanded and now we have a second floor of things like health care, real estate and a tech sector. We also have an outdoor industry sector.”

Nationally, the report found Americans spend the most on trail sports: about $201 billion a year on gear, accessories, vehicles and trip-related expenses.

Camping came second overall, with $166 billion in total spending. Water sports were third, ($140 billion), followed by snow sports ($73 billion) and motorcycle riding ($64 billion).

“We’ve been in double-digit growth for the last five years,” said Jeff Stoger, president of Kurt’s Polaris in Missoula. “After the market collapse in 2008, lots of folks were below water level, so some of that’s just coming back to where we should be. For us, since 2012 we were completely retooled and ready to approach things from a different angle. We had to change the way we did business.”

Stoger said before the 2008 downturn, many sales of snowmobiles and off-road vehicles went to out-of-staters who were outfitting their vacation homes.

“You had a lot of folks who wanted to come here to live the dream,” Stoger said. “They bought toys and got after it. Then that money dried up.”

In addition to rethinking who the customer was, Stoger said the industry started producing new things like side-by-side all-terrain vehicles. Polaris celebrates the 10th anniversary of its introductory models this summer, Stoger said, and those vehicles have rearranged how people recreate in the outdoors.

At the Trail Head outdoor gear store, owner Todd Frank added that the industry hasn’t been good about promoting its economic impact until recently. But signs of its growing strength can’t be missed.

“My measuring stick is I had to hire two more people to work in the rental department this summer,” Frank said. “We’re renting everything we had, every day. Five years ago I had had nobody dedicated to rentals — just regular floor sales people. It’s a super-strong category for us now.”

In contrast, the report found Montana’s total value of agricultural crops, livestock and poultry products was $4.3 billion, according to USDA statistics. State calculations of 2016 gross domestic product for agriculture put the figure even lower, at about $1.6 billion.

“That’s mainly due to falling commodity prices,” said Headwaters Economics analyst Chris Mehl.

Agriculture and mining have both seen significant drops in state GDP since 2013, falling 28 percent and 57 percent respectively. Conversely, Montana’s real estate and financial sectors have climbed 11 percent to about $8.2 billion a year combined, while government service spending has grown 9 percent to $6.9 billion.

One problem in making sense of these numbers is that the outdoor industry doesn’t have an agreed-upon place in the business statistics world. So it compares spending on things like tents and fishing guides with the more traditional GDP measurements of value of goods produced.

“Did you buy that winter jacket for skiing, or because it’s cold to get from your office to the car?” Mehl said. “You might buy a bike to commute to work, but you race it on the weekend with friends. We understand industry is growing, especially in places like Montana.”

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