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Each year Southeast Conference conducts a regional business climate and investment survey in order to track Southeast Alaska business confidence on an annual basis. The results are analyzed by community and economic sector, allowing the data to be used by policy leaders, program developers, and project proponents to form projections regarding the economic direction of Southeast Alaska.

This year several comprehensive questions regarding COVID-19 business impacts were added to the survey, along with questions to clarify how the private sector can best be supported moving forward moving through this period of pandemic. Open-ended questions allowed for increased input by the business community. The survey analysis provides data so that policy leaders can gauge how ongoing needs vary between sectors, industries, and communities.

This survey was developed in a partnership between Southeast Conference, Spruce Root, the City and Borough of Wrangell, the Petersburg Borough, the Sitka Economic Development Association, the Haines Chamber of Commerce, and the Skagway Development Corporation. Rain Coast Data designed the survey instrument on behalf of this partnership.

The survey invited Southeast Alaska owners and top managers to respond to 28 questions. The web-based survey was administered electronically from June 4th through June 18th. A total of 460 regional business leaders participated in the survey, representing 8,550 current regional workers. The survey results include the following findings:

The survey results include the following findings:

Just over half of businesses have received COVID-19 support funding, including 47% that received PPP funding.
Responding employers have already laid off 18.6% their total workforce due to the COVID-19 virus, and cancelled hiring an additional 3,630 workers - mostly in the tourism sector. One-quarter of businesses expect to cut more staff.
Regional business revenue was down 57% on average in 2020 so far, compared to the same period in 2019. By industry, the tourism and arts sectors have experienced the greatest revenue losses, while mining and timber have seen the smallest. Businesses in Skagway and Haines reported the highest revenue losses in the region.
One-quarter of respondents say that they are at risk closing permanently, while one-third say that are not at risk. The mining and finance industries have the lowest risk of closing due to the pandemic, while child care, social services, and the food/drink sectors have the greatest risk.
89% of respondents call the current economy poor or very poor, and 62% feel that the upcoming year will be worse.

272 Southeast Alaska business leaders were asked how COVID-19 is impacting their businesses. Responding employers have already laid off 16% their total workforce due to the COVID-19 virus, with an average of 4 layoffs per organization. One-third of businesses expect to cut more staff shortly. One-third of respondents risk closing permanently. Click on links below to see results:

Summary of 2019 work by Southeast Conference and progress on the economic priority objectives of the regional economic plan.

Southeast Alaska’s shrinking State sector is down by more than 800 jobs over 7 years. Long the top provider of wages in the region, state government is on track to be a distant third in coming years – after municipal government and tourism – and a bountiful fishing season would make the state the fourth largest provider of wages. The regional health care industry had been optimistic about the trajectory of the economic environment, adding nearly 500 jobs and $50 million in wages over the last four years to support the growing health care needs of an aging population. However, steep state cuts to Medicaid funding, compounded by the potential loss of matching federal dollars, have reversed the growing business confidence of that sector. The region’s mining sector has been growing, while the ship building and construction sectors have contracted. Fishing remains mercurial. Southeast Alaska lost nearly 700 seafood jobs in the past four years, with wages down by $22 million. By volume, the catch for 2018 was the lowest in decades, but strong seafood prices have offset losses. The so-called trade war with China is having deleterious impacts on several Southeast industries, including seafood, timber, and mining. Through all of this, the visitor industry has provided a critical counter-balance to a capricious economy. In just seven years, the tourism sector added more than 2,000 annualized jobs to Southeast communities, increasing wages by $85 million. During the summer of 2020, 1.44 million visitors are projected to spend nearly $800 million during their Southeast Alaska holidays. The collective result was a flat economy in 2018. Southeast Alaska decreased in population by 80 people, added two jobs, and overall wages grew incrementally. The region persevered through several rough years,but Southeast Alaskans are resilient and remain optimistic about the future. More than a quarter of regional businesses plan to add jobs in the coming year, and 68% of business leaders expect the coming year to be positive and/or better than last year.

In 2019, the University of Alaska Southeast, University of Alaska Anchorage, Bartlett Regional Hospital, the Southeast Alaska Regional Health Consortium (SEARHC), and Alaska State Hospital and Nursing Home Association (ASHNHA) partnered with Southeast Conference to conduct a Southeast Alaska health care workforce survey. The purpose of the survey was to measure the future workforce needs of regional health care providers along with the obstacles to meeting those needs; and to understand the trends and economic value of health care in the region. Combining this information with with existing data will allow health care partners to develop better regional health care recruitment, retention and training strategies, and forecast future health care workforce needs so they can more effectively plan to fill those gaps.

In April of 2019, 320 Southeast Alaska business owners and top managers from 25 communities responded to Southeast Conference’s annual Business Climate and Private Investment Survey. More than half (59%) of respondents were positive about the economy, calling the business climate “good” or “very good,” an increase of 4% from last year. Looking forward, Southeast Alaska business leaders overall have a similar outlook from a year ago. More than half (56%) of survey respondents expect their prospects to remain status quo, 30% expect their prospects to improve in the coming year, and 14% expect decline. This represents a one percent increase in overall positive outlook over last year. Businesses in Hollis, Gustatvus, Hoonah and Skagway reported the outlooks that are most likely to improve. The timber, food and beverage, and tourism industries reported the most improving outlooks by industry. A new question added to the survey this year was regarding hiring expectations over the next year. More than a quarter of business leaders surveyed expect to add jobs to their businesses over the next 12 months, while 51% expect to maintain total jobs, and 11% expect to reduce total employees. The largest gains are expected in the visitor industry, where a staggering 42% of respondents expect to increase their total staff in up coming year. Skagway employers expect the most significant job gains. Juneau and Petersburg are the least likely to add jobs next year. This year businesses were also asked to rate their preferences regarding how they would like to see to the state achieve a balanced budget, and 320 Southeast business leaders from 25 communities provided their insights. Of the 15 categories of budget components businesses were asked to rank, the top four elements Southeast business leaders would most like to see used to address the fiscal gap include: 1) Reducing oil tax credits (77%); 2) Reducing individual PFD payments (72%); 3) Increasing the percent of market value earnings from the Permanent Fund used to pay for state services (66%); and 4) Instituting a state-wide income tax (63%). The categories businesses would least like to see used to balance the state budget include cuts to the Alaska Marine Highway System, cuts to K-12 education, and implementation of a state property tax. Southeast businesses said they invested approximately $221 million in their businesses last year. The report includes open-ended responses.

We asked the people who experience the marine highway’s benefits first hand to describe its value: the mayors, tribal leaders, business owners, tourism directors, fishermen, economic development experts, and other community leaders. These Alaskans’ stories weave together to form a single tale: Transportation is the lifeblood of coastal communities, and a strong ferry system is essential to local economic development, quality of life, and community well-being. There are 35 ports spanning 3,500 miles that are connected by Alaska’s state ferries. Here are 25 stories from coastal communities that rely on the Alaska Marine Highway System.

Summary of 2018 work by Southeast Conference and progress on the economic priority objectives of the region.

Southeast Conference is responsible for developing a Comprehensive Economic Development Strategy (CEDS) for Southeast Alaska designed to identify regional priorities for economic and community development. The CEDS 2020 Southeast Alaska Economic Plan is a strategy-driven plan developed by a diverse workgroup of local representatives from private, public, and nonprofit sectors. Over the course of 12 months, 27 workshops and strategic planning meetings Southeast Conference members developed an overall vision statement, a list of six goals, 47 objectives, 8 priority objectives, and regional and industry specific SWOTs analyses. More than 400 people representing small businesses, tribes, native organizations, municipalities, and nonprofits were involved in various elements of the planning process.

Southeast Alaska has been experiencing rough economic times, but there are bright points in the region. While the state sector has struggled, we have seen sustained growth in the tourism industry, and there are indications the economy is beginning to stabilize.Dramatic cuts reduced state sector employment in the region by 15% since 2012, a loss of 850 jobs, and an estimated $50 million in lost annual wages. By comparison, the rest of the state experienced a 7.5% decline in state jobs during the same period. State spending cuts have curtailed growth in other industries, especially construction.The regional population declined for the third year in a row, by a combined 1,600 people. About half the population loss consisted of children and 20-somethings leaving Juneau, the community most impacted by cuts in state employment. The seafood industry has been struggling. A poor 2016 harvest led to the loss of 500 jobs; and while the 2017 harvest was on par with 10-year averages, neither the jobs nor the Chinook returned. Chinook harvest levels are the lowest on record. Additionally, the fishing industry is facing the potential impacts of the president’s seafood tariffs. The ferry system continues to face significant cuts, reducing ridership by 20% in the last three years, and bringing 35% fewer visitors to the region. Layoffs were announced at the Ketchikan shipyard, and Ocean Beauty is permanently closing its Petersburg cannery. Just under half of regional business leaders called the Southeast business climate “poor" or “very poor” in 2018, up from 29% in 2015. But not all indicators are bad. There were 380 more jobs in 2017 than in 2016, and we are less than 400 jobs below peak employment levels of 2013. This is almost entirely thanks to massive growth in tourism – specifically cruise ship tourism. Between 2010 and 2019, cruise passenger numbers are projected to increase by 50%, with 1.31 million cruise visitors expected to sightsee here in 2019. Jobs in the visitor industry increased by nearly 2,000 year-round equivalent workers since 2010, and visitors to Southeast spent $65 million here last year. Jobs are poised to expand in health-related fields. Mining and tribal government employment grew last year. Oil prices are improving, and there is hope that this, combined with a permanent fund restructure, will stabilize the government sector. Looking forward, Southeast Alaskans remain optimistic about the future, with two-thirds of Southeast Alaska business leaders expecting their prospects to be positive or to improve in 2019.