In 2019 the ANCi showed some improvement in the 4th quarter following four consecutive quarters of decline. In the 2nd quarter of 2020, with the advent of the COVID-19 pandemic, the ANCi has dropped to levels not seen since the depths of the ongoing recession in 2017 and is now categorized as in the uncertain range of 45 to 55. The ANCi had seen a significant period of decline since Q3 of 2018 when the ANCi reached a recent high point of 59.3. The index was 49.3 in Q2, significantly down 6.1 points from Q4. The more stable six-month moving is the same at 49.3 due to the cancellation of the Q1 survey because of COVID-19 stay in place orders during the scheduled survey period.
During the same time, U.S. consumer confidence increased. The Conference Board’s Consumer Confidence Index ® stood at 98.1, rising 12.2 points from May to June, while the University of Michigan’s Consumer Sentiment Index rose by 5.8 point to 78.1. Both indexes remain significantly lower than levels in 2019 at 126.5 and 98.2 respectively.
2020 Q2 data shows local economic confidence has eroded markedly since 2019 Q4, down 5.9 points to 47 in Q2. Personal Financial Confidence has also declined, down -2.4 points to 63.4 in Q2, likely thanks to federal Pandemic Unemployment Assistance provided the 60,000+ unemployed Alaskans. Future Expectations has declined the most of the ANCi’s three component scores. Future Expectations dropped to 43.4 in Q2, down 8.3 points compared to 2019 Q4.
The ANCi is now tracking at its lowest levels since 2017 as the unprecedented impacts felt by the public and businesses from the onset of the COVID-19 pandemic in early March. The ANCi had been trending higher in late 2019 based on positive news from the oil & gas industry regarding impending large new investments in Alaska’s North Slope. However, Anchorage remained in recession through the 1st quarter of 2020 prior to the onset of COVID-19. Anchorage now finds itself in the depths of sharp recession, though the impacts of tens of thousands of job losses has been mitigated by over $1.5 billion of federal aid in the form of business grants and loans combined with unprecedented unemployment assistance that has dulled the brutal economic bite the economy would otherwise have felt.
Uncertainty is now clearly on the minds of consumers in the most recent ANCi data as a result of COVID-19 combined with the seemingly never ending issues with state budgets that are currently overshadowed in the media and the workplace by the pandemic. The coming months will likely see uncertainty continue to suppress hopes for improvement in the economy in the immediate future.