Photos within by James Nguyen
Alaska, a key economic partner for our region, faces significant economic challenges in 2020 including job loss throughout the state, state budget cuts, and a decline in the labor force, according to Neal Fried, an economist at Alaska Department of Labor, and Mouhcine Guettabi, an assistant professor of economics at the University of Alaska Anchorage.
Fried and Guettabi spoke at our first Alaska Business Forum of the year to share their forecast for Alaska’s 2020 economy and delved into the health of industries that provide stability to our regions, including oil and gas and tourism.
Three key takeaways from our speakers:
- Alaska faces a talent drain
Guettabi said the labor force has declined in Alaska for several years. Between 2010 and 2018, Alaska's labor force decline, from 69.6% to 65%, was the second-highest in the country. Anchorage, the state’s most populous city, lost 20,000 residents to the lower 48 over the last five years, according to the Anchorage Economic Development Corporation’s 2019 3-Year Outlook. Like Guettabi, Fried touched on the significant labor loss in Alaska and also noted that the state has seen outmigration of residents from nearly every age group.
- Bright spots for Alaska’s economy are good for our region, too
Industries that connect Alaska to the Seattle metro region have maintained their strength, including tourism, fisheries, and leisure and hospitality. Guettabi noted that tourism has been critical to stabilizing the Alaskan economy, and that the oil and gas industry is responsible for much of the state’s modest job growth. Alaska has seen record numbers of visitors year after year, with an estimated 2,026,300 visitors traveling to the state between May and September of 2018, according to Alaska’s Resource Development Council. More than half of these visitors arrived by cruise ship – good news for Seattle, which serves as a top hub for Alaska cruises and sees millions of dollars in economic benefits from cruise visitor spending and cruise provisioning.
- The state’s recession is over, but Alaska is still sensitive to threats
Alaska went through its longest recession between 2015 and 2018, said Guettabi, but in the last year had positive job growth at about .4 percent, adding 1,400 jobs. However, half of the state is still losing jobs every year, with Anchorage losing the most. Guettabi said at the current rate of growth in the state, it would take years to return to even 2015 job levels. Fried said he expects modest growth to continue, but that is contingent on not experiencing economic shocks like a national recession. Like Washington state’s trade-dependent industries, industries that export out of Alaska are hurt when the U.S. economy is damaged.
About Alaska Business Forum: The Alaska Business Forum series builds relationships amongst members of the business community and provides information on issues of concern to the Alaskan and Puget Sound regions. These monthly events focus on a variety of industries including maritime, seafood, and technology. Thank you to our series sponsor, Alaska Airlines, our event sponsor, Puget Sound Energy, and our media sponsor, Pacific Maritime Magazine.