2024 Economic Forecast
The last several years have been full of surprises – a mixed bag of bad and good economic news. Perhaps none has been so surprising as the United States’ ability to avoid an economic recession following years of disruption and uncertainty. The steps taken by the U.S. Federal Reserve to combat high inflation seem to be working. While these interest rate spikes have dampened private investment, price stability is expected to have a positive overall economic impact.
The national economy’s growth while prices stabilized should be good news for key sectors in Anchorage which rely on the strength of the Lower 48 economy. U.S. demand for goods fuels much of the cargo throughput of Ted Stevens Anchorage International Airport, and American travelers’ confidence in the economy, and willingness to spend, are critical to Alaska’s visitor industry. These sectors will continue to bring money into the city in the years ahead.
Other mainstays of Anchorage’s economy, oil and gas and federal funding, will also bring a surge of activity into Alaska over the next several years. Long-awaited projects are underway on Alaska’s North Slope. Anchorage’s architects, engineers, and construction companies should see high demand for years as funding from the 2021 federal Infrastructure Investment and Jobs Act, and Inflation Reduction Act, is awarded to projects statewide.
Over the coming year, we expect modest growth by most measures. Our outlook for the number of working-age people living in Anchorage is a notable exception. Anchorage has lost more than 17,000 working-age residents over the past decade, an 8.5% decline. This population loss has likely contributed to staffing shortages across multiple industries. Early retirements during the COVID-19 pandemic likely exacerbated this issue. Statewide, Alaska continues to have fewer than one unemployed person for every two job openings. This change in population is significantly related to a noticeable slowdown in the number of people moving to our city over the last several years. High housing costs, perceptions of public safety, school quality, and other community factors all impact Anchorage’s ability to pull new residents north.
The avoidance of a national recession, large new oil developments, and federal infrastructure funding are all bright signals for the Anchorage economy. Yet, the condition of our community remains of utmost importance to capture these opportunities. Investments in housing, public safety, education, and redevelopment across the community are still needed to retain residents and attract new working-age people to Anchorage.