A barge is guided up to the ramp in Wrangell this summer. In an assessment of strengths and weaknesses conducted for Southeast Conference, among the 1,200 individual businesses and individuals surveyed, better than 40 percent felt transportation costs to be a hindrance to the region's economy.
As this week's Sentinel hits the streets, Southeast Conference's 2016 Convention and Membership Meeting will be wrapping up in Petersburg.
Designated by the state and federal governments as Southeast Alaska's organization for regional economic development, SEC includes 180 member organizations, representing 1,200 people from 32 regional communities. One of the highlights of its annual fall meeting in recent years has been its By the Numbers Report, which looks at economic and demographic trends in the region.
In this year's report, SEC found the regional economy grew ever so slightly between 2014 and 2015, using data from the state Department of Labor, the United States Census self-employment statistics and other sources. As in past years, the annual report was prepared by Juneau-based consultancy Rain Coast Data and distributed at this week's conference.
In all, the region saw the addition of 450 jobs, representing slightly less than one percent growth. Earnings also upticked, increasing by $33 million to a total $2.1 billion. Slight gains were made in retail, private healthcare and the mining industries, which each picked up a handful of positions.
The largest gains were to the region's visitor industry which grew by seven percent, with rises in airline and cruise ship ridership offsetting an eight percent decrease in ferry passenger traffic. The vast majority of visitors to the region – roughly 70 percent – make the journey by cruise ship, and the number of passengers is estimated to increase over the next two years.
The study found Southeast's visitor industry is among its largest in the private sector, making up 23 percent of non-government jobs and 16 percent overall. 2015 saw the addition of 480 new jobs over the previous year. The By the Numbers Report expects the industry to remain strong in coming years, though it suspects a steep reduction in marketing funding by the state – from $12 million this year to only $1.5 million in 2017 – may impact longer term growth.
In Southeast's seafood industry, seven jobs were lost from the previous year, bringing the number to 4,365. Still, seafood makes up nine percent of all jobs in the region and brings in 12 percent of all its employment earnings.
Salmon is the biggest catch in the region, representing in poundage about 82 percent of all commercial seafood harvested. Southeast Alaska's fishermen account for more than a third of all salmon caught in the state, as well as three-quarters of its king salmon. Of its catch in 2015, half of all salmon were pinks.
On the financial side, a poor return on the expected pink salmon harvest departed from the usual odd-year highs for earnings, with 2015 showing a decrease of $43 million even over 2014 ex-vessel value. By contrast, the 2011 and 2013 earnings were valued at $357 million and $375 million, respectively. Though numbers are not yet final, 2016 also seems set to follow suit with one of the lowest returns in recent memory.
Despite these findings, SEC projects next year's seafood harvest to be better than 2016 levels. The expectation is based in part on the two-year pink salmon life cycle spike.
Other industries fared less well. Proportionally, construction took the largest dip with a loss of 50 jobs since 2014. That trend looks set to continue, with early data from this year suggesting another 100 jobs may be lost. The 2,120 workers employed in the sector make up six percent of the region's workforce, and likewise bring in about six percent of its earnings.
The largest sector of employment and earnings is in government, at the state, tribal, local and federal levels. The number of people in Southeast working for one of these entities fell by 100 positions to 13,500 in 2015, still making up about 35 percent of the total workforce. The biggest losses were at the state level, with the report identifying a drop so far of about 500 jobs in the region between 2014 and this summer.
It points out that losses faced in the public sector also have an effect on the private sector, with a number of businesses providing a majority of services for government agencies. Due to ongoing uncertainty surrounding the state's continued spending deficit, the report concludes it will be impossible to predict how grim things will look for the public sector beyond next year.
Among the convention's various key topics and priorities, this year SEC will be bringing forward for discussion several options for bringing long-term viability to the Alaska Marine Highway System. In June the organization was tasked by Gov. Bill Walker to assemble a steering committee from around the state, which has worked to develop several options for the ferry system. After this week's meeting the committee will assemble a final draft for the legislature to consider in its next session.
It has also put forward its new 2020 Plan, an economic development strategy for the next five years which may help local businesses prepare for mid-term trends. Both the 2020 Plan and By the Numbers reports are presently available online in their entirely at http://www.seconference.org/recent-publications.
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