Mid-way through the year, 2022 has already revealed reasons for optimism for the Anchorage economy. Employment continues to build back to pre-pandemic levels, and AEDC is revising the 2022 employment projection upward to match the pace of recovery. Key industries like transportation and logistics and the visitor industry are seeing strong demand, and construction employment gains already reflect new federal infrastructure funding.
While there are positive signs in the economy, other forces that pre-date the pandemic remain stubbornly intractable: Anchorage saw a fifth consecutive year of population loss in 2021, including a loss of working-age people as fewer move in and outmigration continues. The city’s population loss has significantly impacted the number of residents available to work, and labor force availability has been the primary constraint on growth in Anchorage so far this year. Housing costs and other costs of living continue to rise sharply, perhaps limiting opportunities to entice new residents.
Accompanying these mixed signals is baggage our economy brought into the pandemic: a statewide recession spurred by oil price declines which shaved 6,000 jobs from Anchorage between 2015 and 2019 . As we continue the return to a new normal, much remains uncertain for the Anchorage economy.
What is clear: Anchorage is experiencing a whirlwind of forces – some internal but others global – that will shape our economy in the near term. Labor force shortages will continue to impact the pace of recovery, and additional working-age outmigration would further weaken Anchorage’s capacity to meet its own workforce needs. While many economic forces our outside our control, we can retain population and attract new residents by taking steps to enhance our quality of life. Targeted investments in housing, public safety, and redevelopment generally across Anchorage can help stem the tide of outmigration.
The goal of this three-year forecast is to provide some measure of clarity against a backdrop of considerable uncertainty for several key economic indicators. Despite a mixed bag of macroeconomic trends, AEDC is confident Anchorage has the assets to weather these challenges and, given the right investments, to capitalize on emerging opportunities.