Locals confident in Anchorage economy
Following an all-time high in the second quarter of this year, confidence in the Anchorage economy continued to set records in the third quarter, according to the latest Anchorage Consumer Optimism Index (ANCi) report released by the Anchorage Economic Development Corp. The resolution of the oil tax repeal, low unemployment rates and the entry of national retail chains are likely drivers of the boost in confidence.
Sponsored by KeyBank and produced by Northern Economics, Inc. on behalf of AEDC, the ANCi measures consumer confidence using data from a random quarterly sample of at least 350 households in the Municipality of Anchorage. The ANCi reading is expressed on a scale of 0 to 100; a value over 50 indicates relative confidence in the economy and the distance from that median indicates the strength of that confidence.
Comprised of three individual components — Local Economy Confidence, Personal Financial Confidence and Expectations for the Future — the overall reading has risen steadily this year and currently sits at an all-time high of 63.4, a 0.1 point increase from last quarter. The more stable six-month average rose 1.5 points to 63.3, also a new record high.
“The increase in consumer optimism reflects what we’re seeing with our commercial and consumer clients,” says Brian Nerland, KeyBank’s Alaska President. “Business and consumer borrowing is growing and that reflects a general positive feeling about the Anchorage economy.”
The Local Economy Confidence component increased by 0.7 points from last quarter to a new high of 65.9. According to the report, this increase can be traced back to resolution of oil tax uncertainty, continued low unemployment rates in Anchorage and new national retail chains in Anchorage. Personal Financial Confidence, the strongest component of the ANCi, also reached a new high with a reading of 68.7.
ANCi’s Expectations of the Future component was the only reading that dropped, falling 0.8 points from the record high set last quarter. At 59.6, this component still holds the second-highest position in the history of the index. The report suggests that the drop is due to uncertainty surrounding the gubernatorial and congressional elections and how they might affect the future of large projects such as the Susitna Watana Hydro project and the natural gas pipeline.
Download the full report (PDF file) sponsored by KeyBank and Northern Economics here: 2014 Q3 AEDC Anchorage Consumer Optimism Index