Alaskanomics

Alaska's Household Income Down 2.2%

Data released today by the U.S. Census Bureau shows that Alaska's median household income dropped 2.2% in 2009, to $66,953, down from $68,460 in 2008. During the same time period, the U.S. median household income declined 3.5%, to $50,221.

 

Ten-year forecast: only 200 new oil & gas jobs

The Alaska Department of Labor forecasts that oil & gas jobs will grow by 200 between 2008 and 2018, a 5.7% increase. While the Alaska Department of Revenue projects steady declines in oil production, the Department of Labor forecasts that jobs will grow modestly as oil companies work to produce oil that is more difficult to reach, and oil exploration ramps up. The projection does not assume construction of a natural gas pipeline during the next ten years. The low growth of oil & gas jobs puts that sector ahead of only the wholesale trade, manufacturing, arts and information sectors, and lower than state government (9.8%), local government (7.8%) and federal government (7.5%) jobs. The 10-year industry forecast was released in the September 2010 issue of Alaska Economic Trends.

Bradner: current petroleum policy is "too cautious"

In this article in the September 25 edition of the Anchorage Daily News, Tim Bradner notes that with oil production down, petroleum jobs falling, and new exploration setting record lows, Alaska's current government policies - and those proposed by both candidates for governor - do not do enough to encourage investment in the petroleum industry - an industry that supports one-third of Alaska's economy. Bradner points out that Alaska's drilling incentives do not overcome the effects of the high tax rate, which dampens the economics of the high-cost, high-risk investments that could result in major discoveries of oil. Read the full article here.

Ten-Year Forecast for Alaska Health Care Jobs: Up 26.5%

The Alaska Department of Labor forecasts that health care and social assistance jobs will grow by 9,400 by 2018, a 26.5% increase over 2008. Part of the increase is due to the aging of Alaska's population, with the number of Alaskans age 65 and above expected to rise by at least 50 percent by 2018. The 10-year industry forecast was released in the September 2010 issue of Alaska Economic Trends.

Alaska 6th in Nation in Per-Capita Export Value

While Alaska's $3.3 billion in exports in 2009 ranked 40th in the nation, on a per-capita basis Alaska ranks 6th, according to a recent report by Northern Economics, commissioned by the World Trade Center Alaska. Alaska's exports declined 8.8 percent from 2008, faring better than 45 other states. Only Utah had an increase in exports in 2009. Seafood was Alaska's primary export and Japan the state's largest trading partner. Read the full report here.

ACES "severely limits" upside profit potential

Petroleum economics Roger Marks, in a September 1 article in the Oil & Gas Financial Journal, analyzes the progressivity element in Alaska's oil and gas production tax (ACES). Progressivity is not unique in taxation, but Alaska's form of progressivity is uniquely uncompetitive. In most jurisdictions, at lower income levels, there is a lower tax rate, and at higher income levels, a higher tax rate - the U.S. personal income tax is a progressive tax. Most progressive tax structures are bracketed, so the higher tax rate only applies to the dollars in that bracket. The ACES structure is not bracketed, so as prices and tax rates go up, the higher tax rate applies to every single dollar of income, which Marks concludes can "significantly suppress" the upside potential that drives industry investment around the world. Read the full article here.

Alaska Foreclosure and Delinquency Rates Remain Low

Alaska continues to have one of the lowest levels of foreclosures and delinquent residential mortgage loans in the country according to the Mortgage Bankers Association 2nd quarter survey.

  
Alaska ranked 3rd best in the nation behind North and South Dakota as having the lowest percentage of mortgage loans delinquent, meaning more than 30 days past due, but not yet in foreclosure. Alaska’s rate of 4.8% was significantly better than the national average of 9.4%. The U.S. remained unchanged, while the delinquency rate in Alaska did increase 0.2% from 4.6% in the 1st quarter of 2010. The highest rate for Alaska was the third quarter 2009 survey at 5.1% and the recent low was 2.7% in the third quarter of 2008. Nationally the delinquency rate was 6.2% in June of 2008 and increased to 10.4% by the end of 2009. It then showed an improvement of 1% in the first quarter of 2010 declining to its current level of 9.4%.

Alaska ranked 2nd best of all 50 states in both total foreclosures in progress and those started in the 2nd quarter of 2010. Alaska’s total foreclosure rate of 1.4% compares to 4.6% nationally. Alaska’s rate averaged 0.9% in 2008 and then began to rise in 2009 to a high of 1.4% at the 3rd quarter. It has remained at that level for the last nine months. Nationally the foreclosure rate was 2.8% in 2008 and continued to rise each quarter, reaching its current level of 4.6% by year end 2009. It has remained constant at this level in 2010.

Subprime loans, to traditionally unqualified borrowers, were a major source of the mortgage problems that plagued the country recently. However, Alaska continues to have the lowest level of subprime loans delinquent or foreclosed in the nation. Alaska’s subprime delinquency rate is only 11.9% while the national average is 25.9%. The second lowest state is Colorado at 19.1%, so Alaska is far ahead of the pack in this important category. It is important to note that Alaska is still 5% worse than its recent low of 6.3% in the 3rd quarter of 2008 and Alaska’s rate did increase by 0.5% from 11.4% at the 1st quarter of 2010.

Video Clip: What Alaska Can Do (Part 2 of 2)

Northrim Bank Economist and Commercial Loan Officer Mark Edwards continues his conversation about what Alaska can do to spur the economy, with a discussion of multiplying local dollars, stable tax and regulatory environments, and keeping Alaska competitive.

Video Clip: What Alaska Can Do (Part 1 of 2)

Northrim Bank Economist and Commercial Loan Officer Mark Edwards discusses what Alaska can do to spur the economy, including creating jobs, controlling state spending and transferring land into private hands.

Look for Part 2 of What Alaska Can Do to be posted on Tuesday, September 7.

Majority of US Voters Support Offshore Drilling

A new national survey by Rasmussen Reports found that 61% of U.S. voters support offshore drilling, 21% oppose it and 18% are unsure. A slightly smaller percentage support deepwater drilling - 59%, with 29% opposed and 19% unsure. Read the survey results here.