The Alaska Department of Labor and Workforce development predicts that there will be more lost jobs in 2018, but the decline will not be as large as the past two years. Employment is predicted to decline 0.5% as compared to 1.1 percent and 1.9 percent in 2017 and 2016, respectively.
As outlined in January’s Economic Trends, State government and oil were the first two industries to take a hit when oil prices began to fall in 2014. The State began to cut jobs as early as 2015, while oil and as cut a significant number of jobs in 2016. The two industries lost 4,100 jobs in 2016, which is much higher than the 1,000 predicted to be lost in 2018.
After the large losses in oil and gas and State government, losses were felt in the industries that rely on oil and the State for their business. Construction and professional services had significant declines in 2016 and 2017. Like the other industries, they are expected to continue to lose in 2018, but not at the rate seen in the prior two years.
The final group to see declines in employment is industry that relies on people’s spending. Retail is expected to lose another 200 jobs in 2018, which is similar to the loss seen in 2017 and smaller than the 500 lost jobs in 2016. Leisure and hospitality is also expected to decline this year, but only about 100 jobs are expected to be lost.
Not all industries have had job losses through the recession. Manufacturing, health care, financial services, local government, and the Federal government have all remained flat or have seen increases in the past three years.
Manufacturing relies heavily on outside factors, such as commodity prices (seafood) and national and international demand. This helped insulate manufacturing from job losses during the Alaska recession.
Health care has continued to grow throughout the state and has added 2,900 jobs between 2015 and 2017, and is expected to add an additional 700 more in 2018.
The financial sector has been stable over the past three years and is expected to remain stable in 2018.
Both local and Federal government jobs have had slight shifts since 2015. Local governments are expected to see a minor loss this year and while Federal jobs are expected to remain flat, there is uncertainty in the budget, so the forecast will remain unclear for the time being.
While the job forecast is improving for 2018, it is important to remember that the best way to increase jobs is to have financial stability in Alaska. A long-term fix to the state’s fiscal crisis is needed to be able to fully come out of the recession that we have seen in the recent past.
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