Economic recession to end in 2019, Anchorage corporation says
Following years of either economic recession or stagnation, which has resulted in population migration and job loss, Anchorage may finally be turning the corner and entering into green territory, according to a corporation in the city that tracks and surveys the economy.
In two studies released Wednesday, the Anchorage Economic Development Corporation said that not only will Anchorage be out of the recession by 2019, but that job losses will taper off, and, as a result, the confidence in the city's economic future is rising among residents.
According to AEDC's 3-year Outlook Report, the city will "start seeing measurable signs of economic turn-around," and despite early unemployment rises in the first half of 2018, by 2019, those losses will "continue to moderate" and effectively end the period of economic recession seen in the past several years.
The data presented in the report, compiled by a private research and consulting firm in Alaska, promises a positive employment prediction for the next 3 years into 2021 for Anchorage.
Since 2015, around 6,000 jobs have been lost, according to data from the Alaska Department of Labor and Workforce Development.
However, according to the futures figures in AEDC's report, which are estimates or predictions from the McDowell Group, although 2018 through 2020 will see almost no employment gains, 2021 will see an extra 800 jobs in the city.
Some industries like oil and gas, construction, and business tanked by the hundreds. Other industries like healthcare expanded, something AEDC has noted as being a balancing act in the past.
When it comes to employment, AEDC looked hard at the area of Anchorage retail, which they say was "hit hard" in 2018, noting the shuttering of Sam's Club, Sears, and Toys 'R' Us.
When it comes to money in the bank and at residents' fingertips for spending, AEDC had good news, saying, "Anchorage residents will enjoy an uptick in disposable income over the next several years."
How this is likely or even possible, despite flat returns on employment in the short-term, and only moderate gains in 2021, comes down to oil and, more specifically, the Permanent Fund Dividend, the AEDC says.
"The anticipated 2018 Permanent Fund Dividend of $1,600 will pump more money into the economy toward the end of the year," the corporation wrote in the report.
With oil and gas prices at the highest level since 2014, state revenue shortfalls are predicted to balance out, with AEDC saying oil industry spending in Alaska is expected to claim 15 percent this year.
In the report, oil prices per barrel on average should remain much higher, at 2018's $71 per barrel, compared to the lows of 2016's $43 per barrel. However, forecasts compounded in the outlook for 2019-2021 show another decline, with $68 per barrel in 2021.
Much like employment, and often directly correlated to it, Anchorage's population made the short list of economic indicators presented in the 3-year outlook. Also like employment, the rate of decline is predicted to stop this year, and remain stagnant for 2019 and 2020, seeing a marginal gain in 2021.
Since 2013, the number of people living the city has shrunk, despite a positive birth rate or "natural" population increase. That's due to previously reported population drift, meaning people leaving the city despite births outnumbering deaths.
Though 1,600 residents were lost to the Mat-Su Borough, the largest source of in-state population migration, that still leaves another 2,000 or more that migrated elsewhere, not necessarily to other places in Alaska.
In addition to the 3-year outlook report, AEDC also released an index measuring " Anchorage households’ optimism in the health of the local economy, their personal financial situation and their expectations for the future."
That report, compiled by Northern Economics and sponsored by big banks, says that, on a scale from zero to 100, measuring a total lack of optimism all the way up to highly optimistic, Anchorage residents are just above the middle, though much higher than the same quarter in 2015.
The data, which was generated via a random sampling of "at least 350 households located in the Municipality of Anchorage," shows quarter 2 of 2018 tracking higher than quarter 1 of this year.
In the so-called optimism index, AEDC summarizes the results to reflect optimism at levels not seen since 2015. Once again they credit the rise in Anchorage resident's faith in the local economy to be based on oil. "Stable oil prices have allowed some optimism to return," AEDC states.