The Anchorage Economic Development Corporation (AEDC) hosted its annual Economic Forecast Luncheon on Wednesday. The event is a chance to review the economic situation of the past year and look to the current year and what to expect for the future. Mayor Ethan Berkowitz highlighted a few items that he and his administration have been working on the in past year. He shared his optimism for a strong Anchorage and our ability to come through the recession as a great city to Live, Work and Play.
AEDC President & CEO Bill Popp gave the Anchorage Economic Forecast. A quick review of 2016 reminded the audience that we are indeed in a recession, but not all is hopeless. Even though Anchorage lost 2,700 jobs, the unemployment rate stayed relatively stable. This could be because the jobs lost were from people who live outside of Anchorage, retired, or left the state. Another positive piece was that housing hasn’t taken the beating that was originally predicated. Housing prices have gone down, but anchorage is also coming off four years of a seller’s market.
The Business Confidence Index report painted an interesting picture. Over 300 businesses responded to the survey and provided insight into six indices on the confidence level for Anchorage’s economy. Five of the six indices shifted upward slightly since last year’s report. The only one to drop was employment. The confidence in the Anchorage economy is still well below 50 at 33.7, which is .9 higher than last year’s record low. Many businesses are still very pessimistic about the future of the Anchorage economy. Overall, “businesses are somewhat optimistic about their own profits and revenues, but remain very pessimistic about the broader economy.”
The Consumer Confidence Index has an increase in confidence for the first time since Q3 of 2014. The composite rose to 52.0. The Personal Finance Confidence and Expectations also rose to 63.2 and 45.2 respectively.
Popp continued with the 2017 forecast. This year’s forecast predicts another year of decline in Anchorage. Overall, the prediction is that we will lose 2,200 jobs, a 1.4 percent decline. The loss of jobs is always difficult, but compared to the 10 percent loss of jobs over two years in the late 1980’s, this is not that bad. Not every industry will have a bad year. There are areas that are expected to grow, especially health care. Popp did caution that the health care industry has the makings of a bubble right now and with changes in future policy, this bubble could burst. The full report has great detail about the specific areas for growth and decline.
AEDC has started working on a Comprehensive Economic Development Strategy (CEDS) for Anchorage. This is a partnership between the Municipality and AEDC and is driven by a community survey that will conclude at the end of February. The plan will be completed by October 2017 and will outline the areas of focus to help build a stronger, more economically sound Anchorage. A link to the CEDS survey can be found at the AEDC website. Northrim Bank has partnered with AEDC on the project.
The takeaway from the lunch was that there will still be a loss of jobs in 2017 and that business and consumer optimism is positive but fragile. The future rests on, solving the state’s fiscal crisis, improving Anchorage’s foundations, laying out a plan to exand our economy, and stable oil prices and higher production.
Reports and the presentation from the luncheon are located at www.aedcweb.com.
