Montana's economy is positioned to weather the current national economic downturn fairly well, although home building and real estate aren't immune to the slowdown experienced across the country, a panel of local experts said Wednesday.

At a discussion hosted by the Helena Area Chamber of Commerce and attended by 100 civic and business leaders, professionals from across the economic spectrum said national headlines of economic doom don't necessarily apply here.

"It's pretty clear that Montana is doing reasonably well in relation to what's happening with the national economy," said Evan Barrett of the Governor's Office of Economic Opportunity.

Locally, Barrett noted that the Helena area economy's emphasis on federal and state government jobs, along with employers that accompany government, like professional associations and data centers, sets the area's economy apart from other areas of the state.

"One of the most important things for the Helena area economy is a good state pay plan," he said.

Paul Drake, manager of the Helena Branch of the Federal Reserve Bank of Minneapolis, said the bank's forecasts of slowdowns in wage and income growth are proving accurate, although boom times in agriculture and energy are good for Montana as a whole.

"High oil prices, metals and ag prices on balance are good for the state," Drake said.

One of the few cautionary notes of the day came from homebuilder Bill Pierce, who noted that housing starts in 2007 were off sharply from the year before, and 2008 is off to a slow start as well.

"There's no doubt there was an overexuberance in the market the last few years," Pierce said. "It seemed like everyone you knew was building a spec home for sale."

Pierce noted that the 411 housing starts in Lewis and Clark County (including the city of Helena) in 2007 was a drop of 18 percent from the 499 starts in 2006, but nearly on par with the total of 409 housing starts in 2005.

Further, nearly all of the erosion in the local market came in the county. City of Helena housing starts have been fairly constant, with 100 in 2005, 103 in 2006 and 105 in 2007.

The current year isn't looking too promising either, with 51 homes started in the first quarter, down from 88 in the same period a year ago. Pierce said high prices for land and energy along with a challenging regulatory environment have contributed to the slowdown.

Teresa Lightbody, owner of Big Sky Brokers, said the average sale price on a home in the area continued to climb through the first quarter of the year, although the number of homes on the market is up substantially, and homes are staying on the market longer before selling.

She hastened to add that the slowdown is on the heels of a five-year period in which the average sale price in the Helena area jumped 48 percent, to $211,000 in 2007.

"Is (the market) different? Yes. Did it need to get different? Yes," she said.

Despite the slowdown in housing, most panelists remain optimistic about the near-term future of the Helena economy.

"Business in Helena is good," said Brent Rehm, manager of the local branch of the brokerage firm D.A. Davidson, adding that the local office "continues to be among the firm's leaders in profitability."

Andy O'Neill, president of Valley Bank of Helena, said he routinely questions business owners, and also feels the local economy is solid.

"At Valley Bank we have grown our loans, deposits and profitability at or above budget," he said. "We are part of a somewhat conservative economy. I think we're continuing to experience growth, but it's at a slower and lower pace."

Reporter John Harrington: 447-4080 or john.harrington@helenair.com.