Alaskanomics

41st annual Alaska Resources Conference

The Alaska Resource Development Council hosted its 41^st annual Alaska Resources Conference on Wednesday, November 18. This year’s event was a single day, hosted online. As in years past, the presentations were from industry experts and provided an insight in to the past year as well as a look forward to the future of Alaska’s resource industry.

Not surprisingly, most presenters noted that they were pleased that Ballot Measure 1 was defeated and that tax policy wasn’t changed yet again. There were also concerns about what the new administration would mean for resource development. As has been the case in the past few years, the concern over a stable fiscal plan for the state weighed heavy on most presenters.

Mining did provide a bright spot for a year that saw many disappointments and most of the industries represented were looking forward to the start of recovery in 2021. The full agenda with presentations can be found at https://www.akrdc.org/conference.

The 40th Annual Alaska Resources Conference

Last week, the Resource Development Council (RDC) hosted its 40^th Annual Alaska Resources Conference in Anchorage. The event is the chance for leaders from the tourism, fishery, oil and gas, mining, and forestry industries to come together and share highlights and frustrations from the past year and look forward to the coming year.

Overall the presenters and attendees were optimistic about the future of the resources industries in Alaska. There were concerns due to the tariffs being raised on fish, timber, and other goods. The other overwhelming concern came from the possibility of yet another ballot initiative to regulate oil taxes on the North Slope. The group OneALAKSA has been created to protect Alaska’s economy and oppose the Fair Share oil tax measure - an initiative to raise oil taxes that will likely be on the 2020 ballot. OneALASKA is a diverse group that includes organized labor, business and Alaska Native corporations, outdoor recreation, small business, and non-partisan political leaders. The group is working to make sure the ballot initiative does not make it on the 2020 ballot, and if it does, they will fight to oppose it.

Industry representatives painted an optimistic picture for 2020 and moving forward, dependent on the tax structure staying consistent and tariffs on goods. Most were moving forward with plans for expanded development and exploration and new projects.

It was clear that Alaska is moving out of the recession of the past few years, but speakers were hesitant to say that it was officially over. Individual presenters were happy to report milestones in their industry, such as Fort Knox pouring its 8 millionth ounce of gold this past October. BP expressed gratitude to Alaska for the past 60 years of exploration and development and was happy to have Hilcorp bring new life to the legacy fields on the North Slope.

The two days of the Alaska Resources Conference is always a time to celebrate past victories and rally around new challenges. This year was no exception. The room was more optimistic than the recent past, but that optimism had shades of apprehension over forces outside of the industries that could impact landscape of resource development in Alaska.

All presentations, including videos of each session, are located on RDC’s website.

Third Quarter Employment Numbers

The employment numbers for the third quarter of 2019 show that employment has continued increase throughout the state and the unemployment rate remained relatively flat for the quarter.

In July, employment was up 0.5 percent, approximately 1,800 jobs from last July. Construction continued to see the largest gain with an increase of 600 jobs for the month. Oil and Gas was not far behind with an increase of 500 jobs. Growth was steady in the private sector, but there were still areas to see a decrease. Financial Services and the Information Sector lost 400 and 300 jobs, respectively.  

Within the public sector, both Federal and State jobs increased with 400 and 300 more jobs than in July of 2018, respectively. A lot of the job growth came from an increase in staffing due to a busy fire season. Both the Alaska Department of Natural Resources and the federal Bureau of Land Management added jobs during the fire response.

Alaska’s seasonally adjusted unemployment rate fell to 6.3 percent in July, which was still higher than the national rate of 3.7 percent.

August’s employment growth was only slightly up from August 2018, but there was still an addition of about 400 jobs, which is a 0.1 percent increase. Construction and Oil and Gas added the same amount of jobs in August as they did in July. Manufacturing and Financial Services saw the largest loss, each losing 300 jobs.  

In August, the seasonally adjusted unemployment rate dropped slightly to 6.2 percent, while the national rate remained at 3.7 percent.

September saw another large jump with an increase of 2,000 jobs, which was a 0.6 percent increase over September 2018. Construction continued its large gains adding 800 jobs over last year. Oil and Gas and Leisure and Hospitality also grew with 500 and 400 jobs, respectively.

State government lost 400 jobs from last year, mostly due to cutbacks at the University of Alaska due to significant cuts in state funding.

The seasonally adjusted unemployment rate remained at 6.2 percent, but the national average dropped slightly to 3.5 percent. The not-seasonally adjusted rate followed the usual fall pattern with rates rising in nearly all areas of the state. Tourism and fishing drove a lot of the movement in the rates as things started to wind down for the winter.

Up-to-date employment numbers can be found at the State of Alaska’s Department of Labor and Workforce Development’s website.

November Employment

November employment was down 0.4 percent from 2017. That equals roughly 1,300 jobs. Retail had the largest loss of jobs with over half at 700. Professional and business services and manufacturing each lost 500 jobs. Health care continues to add jobs with an additional 500 jobs over last year. Transportation, warehousing, and utilities and construction both had gains with 300 and 200 respectively.

Alaska’s seasonally adjusted unemployment was 6.3 percent in November. This is down one-tenth of a percent from October. This is still well above the national average, which was 3.7 percent in October.

Not-seasonally adjusted rates were higher in nearly every borough and census area, which is normal this time of year. Denali and Skagway rates doubled between October and November, which is common due to their reliance on tourism. Some areas had rates below the state’s average. Aleutians East Borough and Aleutians West Census area were still low with 5.1 and 4.5, respectively. Even though fishing is dying down for the season, these areas still had low rates on average. Sitka, Juneau and Anchorage all had rates well below the state’s average with 4.0, 4.6, and 5.1 percent respectively.

For full employment numbers, visit the State of Alaska's page.

June & July Employment Data

The Alaska Department of Labor and Workforce Development’s monthly unemployment numbers show that unemployment declined slightly in June and July. The seasonally adjusted unemployment rate in June was 7.1 percent, down a tenth of a percent from May and was 6.9 in July. The slow decline is still well over the national average, which was 3.9 percent in July which is 0.1 percent higher than the low of 3.8 percent from May 2018..

There was a decline of 1,700 jobs in June, compared to June 2017. Retail and state government had the largest losses with -1,000 and -600 respectively. Construction did see a bump with 400 jobs gained in June. Healthcare, manufacturing, transportation, warehousing, utilities, and hospitality all had gains with a total of 1,600 new jobs as compared to June 2017.

July only had a loss of 900 jobs as compared to 2017, which was a 0.3 percent decrease. Retail still had the largest decrease in jobs, losing 900 jobs, while oil and gas lost 500 and professional and business services lost 300 over July 2017. Construction continued to grow, but only by 300 jobs. The same areas that saw growth in June continue to grow in July by adding an additional 1,400 jobs.

The public sector losses in state and local government, 500 total, were offset slightly by a gain of 200 federal jobs last month, over last July.

The highest unemployment rates are in areas that do not have activity from commercial fishing and tourism. The not-seasonally adjusted rates followed the usual summer trend of a decrease in areas with fishing and tourism. This is standard throughout the state.

For full employment information, please visit the Dept. of Labor and Workforce Development.

Fishing Industry Update

Alaska’s commercial fishing industry is very important to the health of Alaska’s economy. The industry has seen a decrease in jobs for the past two years. Even with the decreases the past two years, employment is still above the historic average. The preliminary numbers for 2017 look good, and suggest an increase within the salmon fisheries this year. Other catches appear to be down in 2017. This would be good news for a portion of the industry that has taken a hit in the past few years.

Salmon harvesting is the majority of commercial fishing jobs in the state and lost 6.4 percent in 2016. Groundfish (walleye pollock and Pacific cod) makes up nearly half of the state’s catch value and is the leader for poundage from Alaska fisheries. Even though groundfish poundage is high, salmon has a higher return per pound. In 2016, groundfish accounted for 88.3 percent of Alaska’s total catch, but only 48.2 percent of the gross earnings.

Crab fisheries were similar to salmon fisheries in that they saw growth through 2014 and have now declined in employment. It is currently at its lowest level since 2009 and below the 10-year average.

Southeast Alaska continues to have the highest percentage of fishing industry jobs in Alaska, followed by Southcentral. In 2016, Southcentral, which includes Prince William Sound and Cook Inlet, salmon fisheries and halibut recorded the second highest year for total employment.

More details on Alaska’s fishing industry can be found at http://jobs.alaska.gov/seafood/

 

The 38th Annual Alaska Resources Conference

Last week, the Resource Development Council (RDC) hosted its 38^th Annual Resources Conference in Anchorage. The event is the chance for leaders from the tourism, fishery, oil and gas, mining, and forestry industries to come together and share highlights and frustrations from the past year and look forward to the coming year.

As was the case in 2016, presenters were cautiously optimistic about the future of resource development in Alaska. There is still major concern about the State’s fiscal situation. The continued lack of a sustainable plan has caused great frustration in the industry.

There was a bright spot in the first morning’s presentation when Senator Murkowski phoned in to say that the Senate Committee on Energy and Natural Resources released budget reconciliation legislation to open a small part of the non-wilderness portion of the ANWR, known as the ‘1002 Area’ to responsible oil and gas development. On the Senate Committee’s webpage, Senator Murkowski is quoted by saying, “This legislation is a tremendous opportunity for both Alaska and our country. The legislation I released tonight will put us on a path toward greater prosperity by creating jobs, keeping energy affordable for families and businesses, generating new wealth, and strengthening our security- while reducing the federal deficit not just by $1 billion over ten years, but tens or even hundreds of billions of dollars over the decades to come.”

This announcement was an encouraging start to the conference. An additional positive note was that for the 2^nd year in a row, there has been an increase in production on the North Slope and more oil in the pipeline. The increase has been small, but everyone agreed that any increase was good. There was also renewed excitement for the Alaska LNG project, after the announcement of the agreement between Alaska and China. Governor Walker noted that due to the fact that the project had support from the highest levels of government in China and the United States, he was optimistic that the project has new life and could move forward with renewed enthusiasm.

Many speakers noted frustrations that there was still no sustainable solution for the State’s fiscal crisis. Rather than focusing on the negative, presenters chose to focus on what they could do within their own industries to help encourage development across all sectors. Individual presentations highlighted the work that has been done in the past year, as well as plans for future development.

The conference highlighted work between different industries that will help grow the Alaska economy. All presentations, including videos of each session, are located on RDC’s website.

August Unemployment at 7.2 percent

Alaska’s seasonally adjusted unemployment rate continues to creep up and was at 7.2 percent in August. This is two-tenths of a percent higher than the rate in July and much higher than the national rate of 4.4 percent.

Employment continues to drop and preliminary numbers show a loss of 4,800 jobs in August, compared to August last year. Most job losses were from industries related to oil and gas. Industries that saw an increase over last year are health care, local and federal government. Anchorage and Mat-Su saw the largest decrease in jobs, losing 3,100 jobs over last year. The Northern Region, which includes the North Slope lost 1,000 jobs during the same time frame.

August still has strong tourism, fishing and construction numbers and low unemployment numbers for those census areas.

Complete employment numbers are located at the State of Alaska’s Department of Labor and Workforce Development website.

July Unemployment at 7.0 Percent

The seasonally adjusted unemployment rate for July increased two-tenths of a percent to reach 7.0 percent. This is much higher than the national average, which was 4.3 percent last month.

Again, the story for employment in Alaska is job loss. An estimated 7,500 jobs were lost from July 2016 to July 2017. The industries with the largest losses were oil and gas, construction, professional and business services and state government. Each had over 1,000 jobs lost in comparison to July 2016. Local and federal government and healthcare did see gains over last year’s employment in July.

Not-seasonally adjusted unemployment was 6.6 percent in July. It was a down four-tenths of a percent from June, which is a slightly smaller than usual decrease. July and August are the height of seasonal employment in seafood processing, construction, and leisure and hospitality.

The boroughs with the lowest unemployment continue to be areas with a lot of fishing and tourism. Kusilvak Census Area continues to have the highest unemployment in the state at 24.5 percent.

Detailed employment numbers can be found at the State of Alaska's website.

June Unemployment at 6.8 Percent

Alaska’s seasonally adjusted unemployment rate for June rose one-tenth of a percent and sits at 6.8 percent, well above the national average, which is 4.4 percent. While there was an increase in unemployment, perhaps the more telling number is that June employment was down by 5,500 jobs, or 1.6 percent. This is compared to June last year. This number seems high, but in comparison to June 2016, it suggested tapering of job losses. During the fall of 2016, job losses were as high as 9,000 compared to the same month in the prior year. This equals about 2.5 percent. The industries with the largest losses were state government, construction, and oil and gas at -1,500, -1,400 and -1,300 respectively. These three industries account for 70 percent of the jobs lost across the state.

The boroughs and census areas with large fishing were the lowest, Aleutians East and Aleutians West with 2.7 percent and 3.8 percent respectively. Tourism areas also had low rates with Skagway and Denali Borough at 3.5 percent and 4.1 percent. The highest rate was 23.7 percent in the Kusilvak Census Area. The census area is on the Bering Sea Coast, north of Bethel, and often has the highest unemployment in Alaska.

For full employment information, visit the Alaska Department of Labor and Workforce Development.