While the latest available data indicates Anchorage losing jobs in the first half of 2018, job losses are expected to continue to moderate, reaching a point by early 2019 where Anchorage’s economy is no longer in recession.
Each year AEDC offers its perspective on trends in the Anchorage economy. Relying on analysis of a variety of data sources and interviews with key industry representatives, the Outlook considers trends in population, employment, personal income, air passenger and cargo volumes, Port of Alaska volume, building permit values, single-family home prices, new housing units, bed tax, car/RV tax revenue, and oil prices.
Anchorage residents will enjoy an uptick in disposable income over the next several years. The anticipated 2018 Permanent Fund Dividend of $1,600 will pump more money into the economy toward the end of the year, and federal tax reform will free up personal income and spending in 2019 and beyond.
Alaska has also made some progress toward state fiscal sustainability. Senate Bill (SB) 26 (the Permanent Fund Protection Act), signed into law by the Governor on June 13, provides for annual percent-of-market-value draws on Permanent Fund earnings. That alone does not close the budget gap, but SB26 was important enough to secure a rating hike in Standard and Poor’s Global Rating, upgrading the State of Alaska’s general obligation debt outlook from negative to stable.
Meanwhile, 2018 will be a good year for the Anchorage visitor industry. The cruise industry in Alaska is enjoying solid growth and cross-gulf traffic is taking a big jump (+20 percent) in 2018. In 2019, Alaska will host 1.3 million cruise visitors; combined with other tourists, total visitation will likely top 2.2 million.
These positive developments are tempered by lingering effects of recession. Some sectors in the Anchorage economy continue to shed jobs, for example, restaurants and drinking establishments, where employment is down about 5 percent over the past 12 months. Anchorage suffered a net loss of over 5,000 generally high-wage jobs and $400 million in annual wages between 2015 and 2017, mainly in the oil industry, professional services, construction, and state government. The multiplier effect of that loss in employment and income will take time to fully unfold.