Homer Alaska - Business

Story last updated at 8:08 PM on Wednesday, February 9, 2011

Economists predict job growth in Alaska



By Sean Manget
Morris News Service - Alaska

State economists are back on familiar ground, speaking again about job growth.

After more than two decades of touting slow, steady growth, Alaska's economists last year had to report slight declines in the number of jobs, a result of a worldwide economic recession.

But Alaska's economists are back on the job growth bandwagon, predicting slight increases in the coming year throughout much of the state and particularly in its largest city.

Consulting firm Northern Economics predicts a gain of 4,700 jobs statewide in 2011. While that may sound impressive, it's only a 1 percent increase, said Pat Burden, president of Northern Economics.

The gross state product, or GSP, a measure that takes into account the value of goods and services produced in Alaska minus the cost of goods used in that production, will remain relatively flat at about $48.1 billion, or 0.4 percent.

"So, we're back to modest, but sustainable growth which is, I think, something that all of us would appreciate rather than the roller coaster of the past few years," Burden said.

Burden presented the data at a World Trade Center Alaska event Jan. 19. Production of natural resources, most notably a decline in oil production, likely will act as the biggest drag on GSP, with a loss of $430 million this year.

The total value of transportation and utility production in the state is likely to climb by about $10 million, Burden said. Trade is expected to climb about $50 million, or 2 percent, while hospitality and leisure should increase by $10 million, or 1 percent, he said.

"Modest growth, we'll put it that way. We do have some cruise ships coming back, not a huge number of additional capacity though," he said.

The biggest gains will be seen in health and education, Burden said, with the two collectively increasing production by about $170 million.

"Health and education continues to move along at a nice clip," Burden said.

There is, however, some possibility that oil prices may exceed the expected value and remain at roughly $90 a barrel, which would elevate the state's GSP to possibly a record-high value exceeding $50 billion.

"A lot of what we see is influenced by the price of oil, and $50 billion would be a new record for the state," he said.

On the jobs front, health care and education are collectively looking to be the primary driver with an increase of 2,800 jobs, Burden said.

The natural resources sector is set to gain 500 jobs, Burden said, though if oil prices are stable, that could go up, he said.

Meanwhile, economists say Anchorage likely will add 1,100 jobs in the coming year, according to the Anchorage Economic Development Corp.

The turnaround in employment seems to have occurred last year, as AEDC has revised earlier downward predictions made early in 2010.

Last January, AEDC forecasted a loss of 1,200 jobs. Now, it estimates that employment went up by 500 jobs in that timeframe.

"At our past luncheon, in 2010, AEDC forecasted a loss of 1,200 jobs for the year. Boy, were we wrong," AEDC CEO Bill Popp told a crowd of nearly 1,000 businesspeople and elected officials at the Dena'ina Civic and Convention Center in Anchorage a few days after the World Trade Center event.

Health care has long been the fastest-growing labor market in the state, and AEDC expects an increase of 300 jobs in Anchorage this year in that sector.

"The industry's continued job gains extend a remarkable stretch of growth that's

CONTACT US

  • 3482 Landings St.
  • (907) 235-7767
  •  Fax: (907) 235-6571
  • View the Staff Directory
  • or Send feedback

SUBSCRIBER SERVICES