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.
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.
Last year was a tough year for the Southeast Alaska economy. Jobs and workforce earnings were down for the first time since 2007. Population dropped for the second year in a row, the first losses in a decade as well. The reason for our economic distress is clear. Dropping oil prices combined with falling oil production have drastically reduced the state’s share of oil earnings, which previously provided up to 90 percent of the state’s unrestricted revenues. Last year was also the worst year for our seafood sector in over a decade. However, there is also good news. Tourism is booming, and 2017 will be a record year for cruise and air passengers, along with jobs and spending.
If it weren’t for state government’s impending fiscal meltdown, the region would be well positioned for a prosperous future.
The last five years have been good to Southeast Alaska. People came here in droves, to visit and to live. Our overall population increased by 4% as 2,730 new people joined our ranks. We broke records in terms of visitors arriving by airplane, and 2016 could be our top year ever for total passenger arrivals by all modes. Since 2010, we added nearly 2,000 jobs and $308 million in total workforce earnings, and 2015 was a record year for regional employment and earnings.
This publication tells two stories about the regional economy: a positive tale of five-year trends, and a more sobering one-year analysis and future forecast. Over the last five years we added 2,600 people and 1,500 jobs to our economy. Total workforce earnings increased by $275 million, with most of that coming from the private sector ($209 million). With the exception of government, nearly every sector flourished. New jobs and investments occurred in the areas of seafood, tourism, mining, construction, healthcare, maritime, and energy. However, data from the last year especially indicates a contraction. Between 2013 and 2014 there were few areas of growth, and many indicators trended slightly downwards. Our population declined by 30 people. Jobs fell by 300, mostly in the areas of government, construction, and health care. There were 34,000 fewer cruise and ferry visitors to the region. The value of seafood harvested in the region fell by $92 million. The price of gold fell by 10%. Early 2015 job reports show more losses on the way. The most concerning signal is the long-term strength of our government, which accounts for more than a third of all workforce earnings in the region.
This year the report provides a one-year snapshot of regional economic and socioeconomic trends. It shows that while the economy of Southeast Alaska has been in an expansion phase since 2008, in 2013 that growth leveled off. The 12-page overview provides analysis on demographics, employment, and earnings; the maritime, visitor, seafood, mining, timber, and health care industries; along with public sector developments.
The 2013 report provides a two-year snapshot of the Southeast Alaska economic and socioeconomic trends.