The global recession has already smacked Montana, although the state should fare better than the nation, an economist said Thursday.

“We will outperform the United States, but the bad news is we’re still going to feel a lot of pain,” said Patrick Barkey, director of the University of Montana Bureau of Business and Economic Research.

He was one of three speakers talking about the economy at the annual meeting of the Montana Taxpayers Association. Budget Director David Ewer and the Legislature’s chief revenue forecaster, Terry Johnson, discussed the economy’s implications on the state’s budget for the next two years.

Barkey traced how rapidly the economy changed in Montana over the past 11 months. In January, he said the bureau’s forecast was “very optimistic.” In July, he said he revised it downward slightly but remained optimistic because of the expectation of strong farm performance.

By September, Barkey said figures showed weaknesses in nonresident travel to Montana, and announcements of some plant closures came.

Now, in December, Montana has seen a significant downturn in housing and further construction job losses, he said. Energy investments are in doubt. Industries have announced more mass layoffs.

The recession has shown that Montana consumers and businesses were not immune from the housing downturn and credit crisis, he said.

Looking to various key industries in Montana’s economic base, Barkey said nonresident travel is expected to show a 4 percent decline this year. He said he is “very, very pessimistic” about the mining industry over the short-term.

Construction, which had been one of the bright spots in the state’s economy, has dropped, he said, pointing to a significant decline in home building permits.

Looking ahead to 2009, Barkey predicted Montana’s non-farm income will grow by only 0.5 percent after jumping by 4 percent to 5 percent annually in recent years.

He forecast that economic “growth will rebound faster in Montana than in the United States.” Even so, he said Montana will face more job losses and higher unemployment rates.

Johnson, a principal legislative fiscal analyst, said state government tax collections for the next two fiscal years are expected to trail those of the current two-years.

Using the revenue estimates set by a legislative committee last month, Johnson said the state general fund will have enough money to cover “present law adjustments” or the cost of maintaining current levels of caseloads, prisoners and students.

But he said only $50 million in general fund money will be available for new initiatives by legislators or Gov. Brian Schweitzer for the next two years.

Ewer, who is Schweitzer’s budget director, said the uncertain economy is why the governor is insisting on a $250 million reserve in his proposed budget for the next two years.

Nevertheless, Ewer was optimistic.

“We as Americans ought to be hopeful, sensible and resolute,” he said. “We’ve been challenged before as a nation. We’re going to get through this.”

Schweitzer’s proposed budget may be called “present-law lite,” Ewer said. It doesn’t contain as much money as the administration wanted for health-care provider increases or for pay hikes for state employees. But Ewer said one out of every three new dollars is going for education.

He expressed confidence that incoming President Barack Obama will pass an economic stimulus package.

“We are prepared to receive it and make investments quickly,” Ewer said.

The Schweitzer administration will have a list of public works projects — from highway and bridge construction to water and sewer — ready to go, he said. If these federal dollars come to Montana, Ewer said it might free up more money that can be spent on other priorities.