The Anchorage Economic Development Corporation (AEDC) hosted its annual 3-Year Outlook presentation on Wednesday. Like many things these days, it was held virtually with attendees able to listen via Zoom. The video will be available in coming weeks for those who weren’t able to listen live.
Mayor Ethan Berkowitz opened the presentation with a look at the current state of the Municipality. He focused on the fact that while we are all seeing difficult times due to the pandemic, Anchorage is economically strong. He shared heartfelt sympathies for those in the hospitality and tourism, knowing that COVID has devastated the industries. While things are difficult right now, the Mayor has faith that our community will come out of the pandemic stronger. Anchorage has a strong foundation to rely on and the community can and should work to support each other during difficult times.
AEDC’s President & CEO Bill Popp took over the presentation with a quick look at the numbers from 2019 and the first six months of 2020. 2019 was the 5th year of the recession in Anchorage, and Alaska as a whole. Once the pandemic began to take hold on Anchorage, job losses were significant. In the first sixth months of 2020, Anchorage lost over 9,300 jobs, which was a drop of 6.2 percent. Leisure and hospitality took the biggest hit and even the typically strong healthcare industry had a drop in workers for the first half of the year. The unemployment rate increased, but not to the extent that it did in other areas due to the fact that Anchorage’ labor force was the lowest that it’s been since 2005. The jobs report shows that employers are still hiring people, but at lower levels than typical this time of year.
The Anchorage Consumer Optimism Index continued to drop from Q2 2019. Overall, the index remained in the ‘not sure’ category for confidence in the future. Confidence in the local economy and future expectations were both below 50. Confidence in personal finance remained high at 64.3, which was likely fueled by pandemic related income and benefits, as well as an early PFD payout in 2020. Consumers have definite concerns about the local economy, even though their personal outlook is slightly better.
As expected, the 3-Year Outlook was not good. Popp reminded listeners that Anchorage started 2020 still in a recession and was quickly dropped into a global pandemic. Recovery will begin to happen, but it is not expected that Anchorage will be back to pre-recession levels by 2023.
One bright spot was the fact that cargo volume through the Anchorage airport saw a modest increase. This is mainly due to the fact that passenger flights are down, and cargo that it often transported on passenger flights, needed to be brought in via cargo planes instead.
The oil and gas industry had started to rebound but has been hard hit by low prices and pandemic job losses. There has been a significant decline in production and total gross income to the state. It is predicted that we will not see many of the lost jobs return this year. The industry could be hit even harder if Ballot Measure 1 passes in November. The AEDC Board has joined business leaders throughout the state in their opposition of the Ballot Measure, stating it will significantly damage the industry and Alaska as a whole.
No one was expecting a rosy outlook for the next three years, but the statistics provided by AEDC were sobering. Popp reminded listeners that we are in difficult times, but they are not insurmountable. It took years for the Anchorage economy to get here and it will take years to fix, but it can be fixed. Unfortunately we are looking at a loss of 20 years of job growth by the end of 2020. We will begin to rebuild as soon as we are able and leaders will be looking for ways to reinforce the foundation of our economy so that we are able to come back stronger.
For the full reports and presentation, visit AEDC online.
