Alaskanomics

Alaska’s personal income rises 2.5% over one year

Total personal income for Alaska was $34 billion in the third quarter of 2012, according to data released by the U.S. Department of Commerce Bureau of Economic Analysis. This is an increase of $846 million compared to one year ago, or a growth rate of 2.5%.  This marks the fourteenth consecutive quarter of income growth in Alaska since the first quarter of 2009.

The most recent annual numbers report per capita income of $45,529 in Alaska.  That ranks Alaska 7^th out of the 50 states and about 9% higher than the national average.

The largest contribution to income is wage earnings.  They increased 2.1% on average over the last 12 months, while employer contributions to pension and insurance benefits increased 2.5%.  Investment dividends, interest and rents grew by 4.2%.  Contributions from government social insurance programs climbed by 2.1%.  Proprietors’ income showed the largest percentage increase of 7% in the last year.

Of the largest business sectors, gross aggregate wages for utility works rose by 16%, followed by construction at 8%, and art, entertainment and recreation also at 8%.  Other notable income increases came in the accommodation and food service industry up 6%, military 4%, and retail trade plus 4%.

Overall government worker wage income grew by 1.6%, which was brought down mainly by a 4% decrease in federal wage earnings.  This was nearly equal to the 4.1% loss of federal government jobs in 2012.

Alaska’s population grew by 1.3% in 2012; largest growth was in Fairbanks and Mat-Su

The most recent Department of Labor estimate for Alaska's population is 732,298.  That is a 1.3% increase in 2012 resulting from an additional 9,162 people.  A majority of the growth is due to natural increase.  There were 11,034 births reported and 3,746 deaths for a natural increase of 7,288 people. The net of in and out migration was a change of 1,874 people.

The median age is 34, but that is one of the least common ages in the state.  The distribution is heavily weighted on the young and older end.  Of ages under 60, the fewest people are age 33 to 47.  Age 38 has the fewest people at 8,801.

The Municipality of Anchorage population is estimated to be 298,842.  This is an addition of 2,758 people over last year, or a 0.9% increase.  This is all due to natural growth, as there was a net out-migration of 376 people reported.  This is the second year in a row of a net decline in migration, and Anchorage is growing at a slower rate than the state as a whole.

The Interior region grew last year at nearly twice the statewide rate at 2.4% due to large gains in the Denali and Fairbanks North Star Borough.  The region is home to an estimated 115,114 people.  The gains were led by a net in-migration of 1,379, almost entirely into the North Star Borough.  Natural increase added another 1,310 people last year.

The Mat-Su Borough is also on an above average growth rate of 2.2%.  However, this is lower than the 4% growth rate seen in the Mat-Su over the last decade. Positive net migration of 1,196 drove the population increase, while natural increase added another 808 people last year.  The Mat-Su population is an estimated 93,801 people.

The slowest growth was in the Gulf Coast Region at 0.5%.  This includes the Kenai Peninsula, Kodiak, Valdez and Cordova.  The Southwest Region of the Aleutians, Bethel, Bristol Bay, and Dillingham grew at 0.7%.  The Southeastern panhandle grew at 1% while the Northern Region added 1.3% to its population.

Alaska's payroll job count increased by 5,300 in 2012, a 1.6% improvement over 2011

The total number of payroll jobs, not including uniformed military and the self-employed, is about 335,000.  It is important to note this is a preliminary estimate by the Alaska Department of Labor using nine months of actual data from employer tax returns and three months of estimates.  The final numbers will be revised in March of 2013.

2012 saw the largest improvements from Health Care (+4.8%), Professional and Business Services (+4.8%), and Oil and Gas Extraction (+4.6%). The biggest surprise came from the Construction sector, which had a 4.4% increase after declining for the last six years.  This is attributed to an enormous $3.4 billion State capital budget, an additional $454 million in voter approved bond packages, continued investment in older oil fields, and an uptick in residential housing construction.  This was somewhat tempered by a reduction in Federal spending on the military and through the Army Corps of Engineers.

Health Care is benefiting from a demographic situation where Alaska has both an aging baby boomer population and a young, under 20 generation.  People require the most health care at the beginning and end of their lives.

The largest declining sectors in the Labor Department figures were Federal Government (-4.1%) which lost 700 jobs.  Financial Activities decreased by 2% or 300 jobs and Information Services fell 1.6% or 100 jobs.

The State Labor Department is forecasting 4,200 new jobs or 1.2% growth in 2013.  They predict a continued job loss of 300 Federal positions, which will be more than offset by a gain of 600 total government jobs at the state and local level.  Other than a 1% contraction in Financial Activities jobs, they foresee growth in every other sector of the economy in 2013.  Health Care, Oil and Gas and Professional Services are again expected to lead the expansion of job opportunities in Alaska.

The complete report can be read in January issue of Alaska Economic Trends at: http://labor.state.ak.us/trends/home.htm

Alaska unemployment remains lower than the national average

Alaska's seasonally adjusted unemployment rate finished the year at 6.6%.  The comparable national rate in December was 7.8%.  This was an improvement of 0.8% and 0.7% respectively for Alaska and the U.S. versus the December of 2011 rates.

As seen in the graph below by the Alaska Department of Labor, for over four years Alaska has been doing better than the U.S. in terms of unemployment.  The unemployment rate is even better in our largest communities.  The preliminary, not seasonally adjusted, rate for Anchorage was 5.2%, Juneau 5%, and Fairbanks at 6.2%.  The Mat-Su rate improved from 8.9% in 2011 to 8% in December of 2012, but is still higher than the national unemployment levels. 

High levels of unemployment still persist in several rural areas of Alaska.  The worst situations are the Aleutians East Borough at 28.6%, the Municipality of Skagway at 23.5% and the Hoonah-Angoon Census Area at 22.7%.  However, the North Slope Borough has the lowest unemployment levels in the state at 4.6%.

Tourism visitors increase 2% in the summer of 2012.

A recent report by the McDowell Group prepared for the State Department of Commerce showed overall visitor volume increased by 2% in Alaska between May and September of 2012.  Cruise ship visitors increased by 6%, while air travelers decreased by 4% and highway/ferry traffic was essentially flat.

Cruise ships continue to be the preferred method of travel for Alaska visitors, accounting for 59% of summer visitors last year.  Air travel represented 37%, while 4% entered the state via the highway or ferry.  Together, this accounted for 1.59 million out-of-state visitors to Alaska in the five peak summer months.  The additional seven months of the slower season bring the total to roughly two million.

Cruise ship volume has increased for two consecutive years, but is still 9% lower than the peak of over one million passengers in 2008.  Last year was helped by an additional Princess ship and more volume on Holland America.  Alaska was hurt when the smaller company Cruise West went out of business in 2010.

Air travel has also been impacted by the national recession.  Though it decreased 4% last year, overall air travel is 15% higher than the low seen in 2009, at 580,500 visitors.

Highway and ferry travel is a much smaller portion of the visitor level, accounting for only 69,100 people last summer.  This is 19% lower than the recent high in 2006.  Higher fuel prices over this period have made the long drive much more expensive and likely reduced this method in favor of others.

The report states that bed taxes were up in every community survey.  Collections increased 6% in Anchorage, 17% in the Fairbanks North Star Borough, 10% in the Mat-Su and 9% in Juneau.  This statistic will also include taxes generated by resident travelers and can be impacted by changes in room rates.

Despite increase in bed tax collections, vehicle rental tax revenues were down in Anchorage by 6%.  The report hypothesizes that cruise travelers transiting through Anchorage are not as likely to rent a car as independent air travelers.  RV rental taxes also declined by 5% last year.

Click here to download the complete report, along with comparable winter statistics.

Steady Job Growth in Alaska’s Largest City Predicted to Continue in 2013, with 1,700 New Jobs

The Anchorage Economic Development Corporation (AEDC) recently published their 2013 Economic Forecast for Anchorage - Alaska’s largest city.  At their recent forecast luncheon, AEDC announced their prediction that Anchorage will grow 1,700 jobs, or an increase of 1.1%, in 2013.

In 2012, AEDC predicted 1,500 new jobs, with preliminary data suggesting a steady growth of 1,800 jobs, or 1.2% increase.  This wraps up a three-year growth of 5,000 jobs added to the economy, putting Anchorage’s annual average of 156,200 wage and salary jobs.  And, Anchorage unemployment rates dropped again in 2012, dipping to 5.6%, the lowest level since 2008, prior to the recession.  Bill Popp, AEDC President and CEO, explained that we are mostly at full employment with this low percentage, and that there are some challenges for employers to find skilled and trained workers.

“Anchorage doesn’t have a labor pool, we have a labor puddle,” Popp noted at the AEDC forecast luncheon in Anchorage.   

Looking forward, growth will continue in the areas of professional and business services, health care, and further recovery in the visitor industry with statewide cruise traffic expected to get back to the one million passenger mark this year.  Challenges may arise for Anchorage, as the world’s 4^th largest airfreight hub with the Eurozone and Japan still in recession and slowing growth in China.  Two of our mainstays in Alaska’s economy - the oil and gas industry and the federal government – both face uncertainty.  The Alaska oil tax debates continue along with the decline of North Slope production and Federal spending is expected to decline somewhat in 2013. 

Even with the continuing atmosphere of uncertainty and upcoming challenges, the Anchorage economy continues to grow at a steady pace.  Click here to read the full report.

AEDC provides industry expertise and economic resources to both large corporations and growing companies interested in locating or expanding their business in Anchorage. They produce trusted employment data and economic research that provides a clear snapshot of the City’s economy. The economic forecast is prepared for AEDC by the McDowel Group.