With Southeast Conference wrapping up in Haines this morning, municipalities, businesses and individuals from around the region should have a better idea of how the economy is faring.
Each year, SEC's Southeast Alaska By the Numbers report looks at the preceding year's demographic and labor statistics, noting trends and making forecasts where possible. Released just this week, the report for 2016 indicated it had been a tough year for the region, economically speaking. For the first time since 2007 jobs and earnings were both down from the previous year. The labor force declined by 434 net jobs, bringing the total number of positions to 45,260 regionally.
State government jobs bore the brunt of losses, with 565 reductions – roughly 10 percent – bringing employment in that sector down to 4,940 jobs. The losses are part of a continuing trend as Alaska's budget continues to run multibillion-dollar deficits, with cuts to agencies across the board taking their toll on staffing as well as operations. As the report notes, the public sector is a critical part of the region's economy, with state positions garnering 14 percent of Southeast's wages.
Directly related to state spending cuts are declines within the construction industry, with fewer capital projects being undertaken over the past four years. Capital spending by the state in Southeast has dropped by about 88 percent since the 2013 fiscal year, from $385 million to $47 million this most recent fiscal year. Accordingly, construction employment has declined for three years in a row, with a loss of 90 jobs in 2016 bringing the sector's workforce to 2,030. A further 50 jobs are expected to be lost this year.
The economy has seen problems in another important sector. The report notes that “by most measures, 2016 was the worst fishing season in the region in more than a decade.” The seafood industry saw losses of 77,000,000 pounds over 2015 harvest totals equating to about 26 percent. Declining poundage was coupled with declining value, dropping 40 percent from 2013 prices. Fishing and seafood processing shed around 500 jobs regionally last year as a result, or about 12 percent. Individual earnings also had taken a tumble, dropping 18 percent from 2015 totals, by $45 million. In all, 223 million pounds of seafood were caught in Southeast last year, worth $221 million.
The wider maritime economy – which includes fishing but also the Coast Guard – has continued to see declines in jobs and in earnings. Most of these losses were in the seafood and marine construction sectors, due to the aforementioned harvests and capital spending cuts.
Ship building and repair has alternatively seen promising growth since 2014, with jobs increasing by 39 percent, and wages totaling $15.2 million.
Marine tourism has also been on the rise in the same period, growing by 13 percent.
The visitor industry in general has been seeing growth, with an increase of 350 jobs last year bringing that workforce to 7,752 annual positions. Spurring this growth, the number of visitors by sea and by air has continued to climb, making Southeast Alaska the most visited region in the state. Cruise ship passengers are expected to reach record numbers this year, surpassing a high mark set in 2008. 2016 was the second record-breaking year in a row for air passengers, too, with 2017 expected to top that – some of this increase was due to Delta Airlines returning to service in Juneau last summer. Despite this growth, one drawback is the visitor industry's relative earnings compared to other industries, with its workers generally making less.
Along with the loss of jobs overall, the region's population in 2016 decreased from the previous two years by just under a percentage point, with a loss of 648 residents bringing the total to 73,812. Much of this was experienced in Juneau with the reduction of state positions leading to the loss of 300 residents. Six of the seven boroughs lost some residents, with the exception of Wrangell. It grew by two percent over that period, increasing by about 43 residents. The greatest growth was in smaller communities like Gustavus, where 116 new residents meant gains of 26 percent. Of communities with 1,000 or more residents though, Wrangell and Skagway were the only two to see some growth.
Demographically, the report notes that the region's residents have continued to age since 2010. Since the last census, those aged 60 or older grew by 4,100, while declines among teenagers and people in their 40s exacerbate the shift. On the plus side, a 0.5-percent increase in school enrollment – 90 kids – was the largest increase in more than two decades.
Despite these various changes, an economic outlook survey conducted earlier this spring by Rain Coast Data, the firm which prepared the By the Numbers report, indicated a majority of business owners and managers had a positive outlook about the future. This was particularly evident when speaking about their own industry, with the exceptions of timber and construction. Those in the financial and real estate sector were the cheeriest, with 55 percent thinking things were looking up. The visitor, professional services and mining industries also had a generally optimistic view.
Besides the economic report, the other highly anticipated report expected from this week's SEC was a second phase update on the Alaska Marine Highway System, prepared by a steering committee formed last year. The committee has been charged with restructuring the state ferry system to make it more sustainable in the long term. The first phase report was presented to SEC at its mid-session summit earlier this March.
For a complete view of the economic report, a copy should soon be made available online at http://www.seconference.org/recent-publications.
Reader Comments(0)