Alaskanomics

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.

Resource Development Council Hosts Annual Conference

Earlier this month, the Resource Development Council (RDC) hosted its 37^th Annual Resources Conference. It’s the time of year when the resources industries come together to celebrate the accomplishments of the past year and look ahead to the coming year. Conference organizers took a new approach to the sessions with panel discussions and it was a great change. Instead of hearing from each presenter individually, the moderator led a facilitated discussion and asked questions relevant to each specific area. This provided a well-rounded discussion on current events and a look to 2017 and beyond.

This year’s presentations provided a cautiously optimistic look towards the future of resource development in Alaska. Recent years have been tough for oil and gas, mining, and forestry. Fishing and tourism have had good years, but also see a lot of regulation and federal overreach.  This year, speakers noted that with the shift in federal administration, there could be some hope for a change federal overreach and regulations that have crippled the industry in recent years. There are still a lot of unknowns, but most are hopeful for a favorable adjustment to way the State of Alaska and the Federal Government interact.

The area where the optimism faded was when the state’s fiscal situation was discussed. For many, the lack of a sustainable budget plan causes angst and uncertainty. This topic has been a headliner at the conference for the past couple of years and while attendees hoped that things would be better next year, they were realistic to the fact that difficult decisions were needed to maintain any sort of sustainable budget. Many stated that while they were hopeful for a solution, they knew that hope was not a good strategy and real work must be done to move the state forward. Numerous legislators were in the audience throughout the conference and speakers reminded them of their responsibility to make difficult decisions to maintain a functioning state government.

The team at RDC always puts on a great conference, with detailed information on the happenings throughout resource development, networking opportunities and a chance to plan for the future of Alaska. Presentations and videos of each session are saved at RDC’s website.

Resource Development Council Conference Wrap-up

The Resource Development Council hosted its 36th Annual Alaska Resources Conference on November 18 and 19 in Anchorage. Each year, members of the resources industry gather to discuss the past year’s accomplishments as well as look to the future of tourism, fisheries, oil and gas, mining and forestry.

Governor Walker opened the conference with a few words about his desire to make sure that there is more oil in the pipeline for all Alaskans. He was encouraged about the exciting time in the mining industry and the good steps being taken in the AKLNG project. The Governor also noted that he would be soon releasing his plan for a more sustainable budget and it would be without sacrificing Alaska. He assured attendees that he would not shy away from the tough decisions that are part of his job description. He also noted that he would stay strong in his message to Washington DC and that Alaskans need more access the natural resources in our state.

The conference continued with the updates from the industry, including an overall update from State of Alaska economist, Neal Fried. Presenters shared a lot of what attendees already knew and gave a sense that while there are struggles with the resource development industry, that there are also things to be excited about and there are opportunities available.

News from the oil and gas industry was understandably less optimistic as it has been in past years. Presenters from ConocoPhillips and BP discussed the work being done to progress the AKLNG project. Both companies want to continue the momentum that was gained during the special legislative session. All parties must be aligned to assure success for the project.

The Arctic, Federal overreach, Pebble Mine and Point Thomson rounded out the day’s discussions. Due to the United States’ Chairmanship in the Arctic Council for the next two years, the world is focused on Alaska. Many different interests throughout the state and the rest of the US are competing for the attention of the Arctic Council and the world.

Day two of the conference started with a session titled, “Real Solutions to Alaska’s Budget Crisis”. It included a presentation about the necessity to look at state spending and how it relates to a sustainable budget. Everyone agreed that there were no easy answers when it comes to the State budget. Spending and new revenue will need to be part of the equation and the speakers agreed that something would have to be done sooner, rather than later. Today’s budget crisis is much different than the last one the state faced. A concern is the fact that we are depleting budget reserves without anything to refill those reserves on the horizon. Using the earnings from the Permanent Fund while keeping the dividend, buys time to work on a more sustainable solution. Not doing anything in 2016 damages the ability to come out of this crisis in the future. Speaker Mike Navarre, Mayor of the Kenai Peninsula Borough, noted, “There is no perfect plan and we cannot be crippled while waiting for the perfect plan”.

The day continued with discussions about oil tax credits, the progress being made in Cook Inlet, mining and a wrap-up on work on the AKLNG project. The increased production in Cook Inlet has allowed Southcentral Alaska to have a needed gas supply. It was also stated that discovered but not-developed fields could bridge the gap until the AKLNG project comes online in the mid-2020s (if approved).

AKLNG is moving forward and the project received the right to export to both free and non-free trade countries. The Alaska Oil and Gas Conservation Commission (AOGCC) has supported gas offtake and carbon dioxide reinjection. Both of these are good steps in moving forward to a successful project. While there are many more steps to take and hurdles to overcome, the many are hopeful that the project will proceed and be a success. At the end of the day, we all need to do what needs to be done to ensure a successful project to serve Alaskans for many years to come.

For complete conference information and presentations, visit http://www.akrdc.org/november-conference

Alaska September Unemployment at 6.4 Percent

The Alaska Department of Labor and Workforce Development released its September unemployment numbers on Friday. The seasonally adjusted rate for September has dropped slightly from August and is 6.4 percent. The non-seasonally adjusted rate began to climb as summer tourism and fishing winds down for the year. The non-adjusted rate in September was 5.7 percent. 

Most boroughs and census areas had increases in the unemployment rate as summer activity slowed for the year. 21 of 29 boroughs and census areas had an increase. Bristol Bay Borough and the Dillingham Census Area has the highest increases in the state. The highest unemployment rate continues to be in the Kusilvak Census Area, which is currently 19.5 percent. The lowest is in the Aleutians West Census Area, holding at 2.9 percent. 

The Alaska unemployment rate has not shown a noticeable trend during 2015, even while the National average has shown steady decline in the past few years. The challenges being faced by the State of Alaska have yet to be felt in the unemployment rates. The unemployment numbers will continue to be monitored closely as the economy shifts into the winter months and potential turmoil.  

For detailed statistics, visit http://live.laborstats.alaska.gov/ces/

Alaska Unemployment at 6.8 percent in June

In the past two years, the unemployment rate has been relatively stable and remained close to the 10-year average. June’s rate increased one-tenth of a percent from the revised May number. Nationally, unemployment is at 5.3 percent, down from 5.5 percent in May.

During June, the more urban areas in Alaska saw increases in not-seasonally adjusted rates because their economies are typically less seasonal and do not rely on tourism and/or fishing seasons. Bristol Bay Borough and Denali Borough have the lowest rates with 3.7 and 4.3 percent, respectively. Bristol Bay’s economy is dominated by the seafood industry and Denali relies on tourism in the summer months. The highest rate of unemployment continues to be the Kusilvak Census area at 25.7 percent. This area was recently renamed from Wade Hampton Census Area.

For full employment information and statistics, visit http://live.laborstats.alaska.gov/

Alaska Unemployment at 6.8 percent in May

The State of Alaska, Department of Labor and Workforce Development released its unemployment numbers for May. The seasonally adjusted unemployment rate remained relatively unchanged at 6.8 percent. This is only one-tenth of a percent higher than it was in April. It is still above the national average, which was 5.5 percent in May. In comparison, the non-seasonally adjusted rates fell four-tenths of a percent. This is common with the increase in summer tourism throughout the state.

Most boroughs and census areas had a decrease in the unadjusted rates for April. Denali Borough had the biggest drop going from 17 percent to 5.1 percent. Summer tourism is responsible for much of the increased employment in Alaska. The areas that had an increase in unemployment were the North Slope Borough, Kodiak Island Borough, Aleutians East Borough and Aleutians West Census Area. The North Slope is typically stable throughout the year, but had an unusual winter construction season. The other three are usually different than the rest of the state because of the increase in employment during the winter fishing season.  

Detailed employment statistics can be read at http://live.laborstats.alaska.gov/ces/index.cfm

Unemployment in March at 6.5 Percent

The Department of Labor and Workforce Development released the March unemployment rate early this morning. The rate for March was up slightly from February and stands at 6.5 percent. The national average remained steady at 5.5 percent.

The not -seasonally adjusted lowest and highest rates in the state remained the same with the Aleutians East Borough and Aleutians West Census Area being the lowest at 3.2 and 2.6 percent respectively; and Wade Hampton Census Area the highest at 26.6 percent.

As part of their monthly press release, the Department highlighted the job numbers of the different regions throughout Alaska for the 1^st quarter of 2015.

• Anchorage’s retail trade was the biggest source of new jobs, while professional and business services had the largest losses. The lack of snow cut into winter recreation, which created weakness in the leisure and hospitality industry.
• Southeast jobs were lower than the same period last year due to the less-than-usual growth in construction and seafood processing.
• Southwest was also lower than last year even with the seasonal growth from winter fishing.
• The Gulf Coast saw gains in seafood processing, mining, and leisure and hospitality that balanced out the loss in health care and government jobs.
• The Interior, including Fairbanks, had a small loss in jobs, but health care in the region is growing.
• The Northern Region had an increase in jobs from the same period last year. Health care increased, as did local government.

For full employment statistics, visit www.laborstats.alaska.gov

Alaska and the Puget Sound

*
Earlier this year, the Seattle Metro Chamber released a study that shows continued growth to the Puget Sound region due to Alaska’s economic impact. The report shows that Alaska’s impact can be seen in a number of sectors including freight/cargo, seafood, passenger transportation and tourism, maritime support, refining, health care, and education. In 2013, Alaska accounted for 113,000 direct, indirect, and induced jobs that generated $6.3 billion in wages for the Puget Sound region.

Last week, Seattle hosted a panel of Alaska experts to discuss the impact of low oil prices and how it relates to business throughout the Northwest. The Puget Sound is not expected to feel a real impact in 2015 but could start to feel a pinch in 2016. Puget Sound businesses provide $5.3 billion in goods and services to Alaska, which travel through Puget Sound ports. 2015 contracts are already set, so traffic is not expected to change, but could drop in 2016 if Alaska changes its spending plan for the coming year.

As is the case with the Alaska economic environment, 2015 will not be a crisis for the Puget Sound region, but businesses are more cautious moving forward and planning for 2016. Bill Pedlar, Executive Committee Member with the Alaska Travel Industry Association noted that in 2015 the number of people taking Seattle-based cruises into Alaska is expected to rise 5 percent to record levels, but it could change next year. Marketing budgets will be tight, which will make it harder to win passengers. More than 1 million people pass through Seattle-Tacoma International Airport on their way to an Alaska cruise.

The Puget Sound and Alaska will always be strongly linked and the Pacific Northwest is watching the Alaska economy closely as they plan for the future.

For the “Ties that Bind” report, visit http://www.seattlechamber.com/home/business-tools/community-news/detail/2015/02/06/ties-that-bind-puget-sound-to-alaska-stronger-than-ever

*Photo from the Seattle Metro Chamber