Economy of Bonner County

An Attractive Place to Live

Bonner County's beauty, recreational opportunities, and quality of life have attracted thousands of new residents since the mid-1980s. The resulting population growth has influenced the Bonner County's economy in many ways. Population growth spurred growth in the construction industry, retail stores, health care providers, public schools, service organizations, and government agencies. It also increased competition for jobs, increasing unemployment and keeping wages low. Between 1990 and 2000, the county's population grew 38% from 26,622 to 36,835. In the next three years, it grew to 39,162. Since 2003, population growth has accelerated, and very rapid population growth is likely over the next few years.

Percentage Population Growth

A Growing Labor Force

The “labor force” comprises civilian residents 16 years and over, who are not living in institutions such as prisons, nursing homes, and mental hospitals, who are either (1) employed or (2) unemployed and actively seeking employment.  Approximately 18,500 people participate in Bonner County's labor force.

From 1994 to 2004 Bonner County's labor force grew 28%, while the U.S. labor force grew 12%.  One reason why Bonner County's labor force grew faster than the nation's is that Bonner County had proportionately more youth entering the labor force. Bonner County is fortunate, because its population between 15 and 34 years of age grew 26% in the 1990s, while the U.S. population between 15 and 34 years of age declined 1%.  That U.S. decline in the under-35 population is one reason why the U.S. labor market became so tight before the U.S. economic slowdown began in 2001.  Bonner County's employers benefit from the rapid growth of the working-age population. 

Forest activities, agriculture, and summer tourism play major roles in Bonner County, so employment peaks in late summer and falls throughout the winter. Employment falls to its lowest level in spring when muddy roads hinder loggers and winter tourism draws to an end. In 2004, for example, the county's unemployment rate peaked at 8.6% in March and fell to 4.8% in August.

Although Bonner County created hundreds of jobs, its unemployment rate continually hovered above 8% from 1990 to 2003. The highly seasonal employment pattern and the loss of high-paying lumber jobs caused some of the unemployment. Another factor boosting unemployment is the tendency of population growth to outstrip employment growth. Many new residents possess good job skills and are often willing to accept jobs for which they are overqualified in order to remain in Bonner County.

In 2004, exceptionally strong job growth pushed the unemployment rate below 7% for the first time since 1989. Although the unemployment rate has fallen, manufacturers and other businesses still find there is plenty of skilled labor available at reasonable rates.

A Successful Manufacturing Base

For more than a century, Bonner County's economy depended almost entirely on logging and lumber mills.  The U.S. Forest Service also played an important role in the economy—both as a source of logs and as an employer. Between their peak in 1992 and 2004, Bonner County lost 190 of the 1,380 jobs in logging, wood products manufacturing, and the U.S. Forest Services. 

While forest products employment declined slightly, other manufacturing sectors have expanded to create a greater variety of jobs. This has helped Bonner County overcome its long-term dependence on the lumber industry, which tends to be extremely volatile in economic cycles, as well as providing a greater range of job opportunities for residents.

In the 1980s, electronics and food processing jobs entered the economic mix.  In 1984, non-wood-products manufacturing operations employed only 251 people.  By 1994, they employed 526 people.  Since 2000, producers of plastic products and equipment have grown at a strong rate. By 2004, non-wood-products manufacturing operations employed an estimated 1,140 people.

The county's largest manufacturers that do not produce lumber or other wood products include:  Litehouse, which employs approximately 350 people making salad dressing and sauces; Unicep Packaging, which employs more than 100 people making one-dose plastic applicators; Encoder Products, which employs more than 100 people making electronics products; Cygnus, which employs more than 70 people fabricating customized metal products; Thorne Research Products, which employs more than 60 people making nutritional supplements; and Diedrich Roasters, which employs more than 50 people making coffee-roasting equipment.

The growth of these larger manufacturing and the relocation of more than a dozen manufacturers to the county since 2000 have led to astonishing growth of the manufacturing sector. While the U.S. economy lost nearly 3 million manufacturing jobs, experiencing a decline of 17% in manufacturing jobs between 2001 and 2004, Bonner County gained 500 manufacturing jobs, experiencing growth of 36% in manufacturing jobs.

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A Tourist Mecca

Tourism grew rapidly in the late 1980s and early 1990s. Summer tourism grew, as North Idaho became better known as a tourist destination. Sandpoint's reputation as a haven for the arts also contributed to the growth of tourism.  The 1990 expansion of Schweitzer Mountain Resort boosted winter Starting in the late 1980s, summer tourism began to grow rapidly.  In 1990, a major expansion of the Schweitzer Mountain ski area boosted winter tourism. In the last two years, tourism has been growing at a strong clip again. The unprecedented national attention that Sandpoint received this year is likely to greatly increase the number of tourists over the next few years.

Tourism employment normally reaches its high point of the year in August, falls to its lowest level before Thanksgiving, rises to its winter peak between Christmas and New Year's, and then falls to its lowest point in April.  For example, in 2004, tourism employment went from 1,840 in January to 1,447 in April, then rose to 1,962 in August, then fell back to 1,520 in October.

Success in Other Sectors

The biggest source of new jobs in Bonner County in the 1990s was Coldwater Creek, the Sandpoint-based mail-order catalog company. Started 20 years ago at the kitchen table of Dennis and Ann Pence, Coldwater Creek became the county's largest employer by 2000. In 2001, it downsized, but it continues to have 400 high-paying corporate headquarters jobs in Bonner County.

The construction, finance, insurance, and real estate industries in Bonner County are nearly three times larger than they would be in most counties of its size. That reflects the county's exceptionally strong population growth, the large number of vacation homes built here, the high level of commercial and industrial development over the last decade, and the growth of the home-grown independent bank, Panhandle State Bank.

Population growth and the aging of the population boosted health care 89% from 583 jobs in 1994 to 1,100 jobs in 2004. Bonner General Hospital, the Sandpoint hospital serving all of Bonner County, is the county's largest health care provider. In 1997, Life Care Centers celebrated the grand opening of its Sandpoint nursing home facility. In recent years, a wide variety of medical offices and other health care providers have grown up to take care of Bonner County's growing population.

As in many forested counties in the West, Bonner County's largest landlord is the federal government.  The federal government owns 45% of the 1,918-square-milecounty, and the state government owns 15%.  The U.S. Forest Service has played a major role in the economy of Bonner County for decades.  About 120 people work year-around for the Forest Service, while another 80 people work only in the summers.  In addition, several Forest Service contractors employ people in Bonner County. The U.S. Postal Service is the next largest federal employers.  Altogether, federal agencies employ 220 people in the winter and up to 330 people in the summer.

Meeting Economic Development Challenges

Despite strong job growth, many Bonner County residents are struggling with low incomes. In 2002, Bonner County's per capita income was $21,865, while the State of Idaho's per capita income was $25,476 and U.S. per capita income was $30,906. Economists consider per capita income be one of the best measures of an area's economic prosperity. The gap between Bonner County and U.S. incomes has persisted for two decades, and is a cause for some concern. About 15% of Bonner County's population lives below the poverty level, while 13% of the U.S. population does. The county's lower income levels are largely the result of relatively high unemployment and low wages.

To increase employment and income, the Bonner County Economic Development Corporation is working hard to bring new businesses into the community and to help existing businesses expand. It already has succeeded in helping to bring the unemployment rate down. From its inception in early 2001 through the fall of 2004, BCEDC has brought 350 jobs to Bonner County. That's roughly one-third of the total jobs added in the county during that period. The jobs created through BCEDC's assistance pay an average of $35,600, compared to an average annual wage of $24,700 for all jobs in Bonner County.

For more information on the Bonner County economy or relocating your business to the greater Sandpoint area, contact the Bonner County Economic Development Corporation at: www.bonnercountyedc.com

Take an online tour of our local business incubator, the Bonner Business Center at the Tour Sandpoint site

For assistance with job search, employee recruitment, job training, labor market information, and unemployment insurance, contact:

Sandpoint Job Service
2101 W. Pine Street Sandpoint, ID 83864
(208) 263-7544
24-hour Hot Line (208) 263-7547

Idaho Commerce & Labor Web Site:

http://cl.idaho.gov

ICL Job Listings:

http://cl.idaho.gov/iw/jobsearch/js.asp

Prepared by:

Kathryn Tacke, Regional Labor Economist
Idaho Commerce & Labor
1221 W. Ironwood Dr., Coeur d'Alene, ID
(208) 769-1558 ext. 3984
E-Mail: ktacke@cl.idaho.gov