Tis the season for forecast luncheons throughout Anchorage. One of the largest business events of the year is the AEDC Economic Forecast Luncheon, held on Wednesday, January 27. The format was like past events, with an introduction from the Anchorage Mayor, the Anchorage Economic Forecast from AEDC President and CEO Bill Popp, and a keynote address.
Mayor Berkowitz kicked off the presentations by saying that he has two sets of responsibilities in Anchorage, foundational and aspirations. He continued by sharing his vision for Anchorage in the coming year. He said the municipality will focus on public safety by working to increase the number of police officers from 350 to 400 officers. He also wants to help make Anchorage attractive for investment that will help the state as a whole. The Mayor said that we need big thinking to fix the affordable housing issues in Anchorage and address the issue of homelessness in our city. The Mayor concluded with a list of how his administration has managed resources well and decreased the budget to a level that is sustainable.
The focus of the luncheon was Bill Popp’s presentation of the 2016 forecast. The complete forecast is at aedcweb.com. Population is expected to go down approximately 2,200 people, which is higher than the loss of 1,500 seen in 2015. As was the case last year, many of those individuals will move out of Anchorage to the Mat-Su Valley to find a break in housing costs and availability. There could also be significant losses if there is a troop reduction at JBER. We will know later this spring if that will occur.
The jobs forecast also shows a reduction, but less than the population decrease. Anchorage is predicted to lose 1,600 jobs during 2016. The largest reductions will be seen in Oil and Gas (-600), Government (-500), Construction (-400) and Professional and Business Services (-400). The biggest winner will be Healthcare, which is predicted to add 300 jobs this year. The industry has added 5,000 jobs in the past ten years. The loss of 1,600 jobs is about 1 percent of the Anchorage job market.
Popp continued with the Business and Consumer Confidence Index reports and the reports illustrated how the state’s fiscal crisis was beginning to erode the faith of local Anchorage business leaders and the public. The composite of the index is at its lowest point since the survey was started in 2009. The composite index is at 48.8, down 7.2 points from 2015. Business leaders are now pessimistic when it comes to the Anchorage economy. The most significant change in this year’s report was the index that reflects the Anchorage economy. It was down from 46.9 in 2015 to 32.8 this year. Business leaders are mildly confident in their own business but are pessimistic about the state situation. 89 percent believe that it is a barrier to growth in the coming year.
The presentation concluded with the message that there is an upside to the forecast. Anchorage has the ability to invest in ways to improve the lives of residents and the work climate in the city. It is also possible to fix the fiscal crisis this year, which would go a long way to rebound the confidence of business leaders and individuals.
The Associated General Contractors of Alaska hosted their annual Spending Forecast event and released the 2016 Alaska’s Construction Spending Forecast on Thursday, January 28. Like many other sectors, spending in the construction industry is predicted to be down in 2016. The drop will bring the industry back to the levels of a few years ago before there was a bump in spending in 2014 and 2015. The bright spot in the forecast is that federal spending will increase, mainly due to Department of Defense spending. Tourism, fishing and air cargo is also likely to increase. These industries are aided by the low oil prices and the state will benefit from increased activity.
The short term outlook for construction spending will be challenging, but many feel that the industry will get through the rough patches and will be better off in the long term. The full report is located at agcak.org
