I am often asked if I think a recession is on the horizon. If you drive around Bozeman and Gallatin County and see the number of projects under construction, you certainly wouldn’t think so. Economic activity in our region is quite strong. Businesses are thriving, and people are still moving here.
One of the leading indicators of economic health we follow is housing permits. Depending on the project, it can take many months to years to go from permit to completed project. Thus permits give us a window into future construction activity. The two graphs below show Bozeman alone and then the whole of Gallatin county by type of housing. Bozeman has slowed a little year over year, but is still strong and that slowdown may have more to do with price and availability than with need. The whole of Gallatin county is actually up with the exception of the large project permitted in May of last year.
While there are warning signs of a potential recession, like people spending down their savings and running up their credit cards (which is not sustainable), we haven’t yet seen the leading indicators in our housing market. However, nationally, May housing stats were down 19.3% YoY. Multifamily and single-family permits are falling nationally. So despite the continued housing permit momentum in Gallatin County being good news, we need to remember that we are not an island. The national housing trend, continued inflation, record federal deficits, and international and domestic turmoil can undermine our local economy.
If you have been spending down your savings or running up your credit cards to make ends meet, best to do some serious budgeting to bring your financial house in balance. We can help. If you have further questions regarding this topic, please send me an email at cgerst@bankofbozeman.com or stop by the bank to chat. It is my pleasure to address your concerns regarding your finances or the financial health of our community.
Sincerely,
Clinton Gerst