Alaska’s overall economic performance among the worst in US for several years, research finds

aerial photo, aerial photo, aerial photography, aerial photography, aerials, anchorage, center anchorage

For the past seven years, Alaska’s economy has been at or near the bottom in four key indicators of economic health, according to a report released Thursday by the University of Alaska Center for Economic Development.

Overall, the state’s poor performance between 2015 and 2021 — in terms of employment growth, unemployment, net migration and gross domestic product — places Alaska in a lower economic position. in all 50 states and the District of Columbia, said Nolan Cloud, the center’s executive director and lead author of the 10-page report.

“Alaska is arguably the lowest-performing state since 2015,” Cloud said in an interview Thursday. “I think it is.”

The report concluded that “by all the measures described here … Alaska’s economy appears to be stagnating relative to the rest of the United States.”

“This low performance places Alaska at or near the bottom of all states and DC for the period from 2015 to 2021, as well as for the pandemic-affected period from 2020 to the present,” it said. “This marks seven years of weak or negative growth as measured by (gross domestic product, the total value of all goods and services produced) and employment, and the highest rate of net emigration of any state or DC.”

The report takes a brief but disturbing look at these economic indicators in Alaska and nationally. It does not explore policy solutions. It points to years of low oil prices as the main culprit, although those prices have improved in recent months. Oil prices are the key to Alaska’s state revenue, and higher prices provide funding for valuable oil projects.

economy

In an interview, Cloud offered some ideas to help turn things around, including continuing to diversify the state’s economy and redistribute revenue into areas that can attract people to Alaska, such as investing in improving the education system.

Also Read :  Car Owners Are Struggling With Their Auto Loans

He also noted that the report’s “strong” picture of the national economy is based on the performance of the rest of the United States at a time of relatively strong economic health nationally.

Bill Pope, head of the Anchorage Economic Development Corporation, said the report provides a clear and accurate picture of the state’s and Anchorage’s economic problems. He said net emigration — more people leaving Alaska than coming in — is a particularly vexing problem, holding back economic recovery due to a lack of available workers.

The bright spots, Pope said, are employment improvements in recent months, including in the oil industry, with ambitious oil projects expected to create thousands of jobs, and the industry’s growing emphasis on marketing the country’s attributes to potential workers. could move here, for example in tourism and medicine.

“I think it’s a call to action to the public that we can no longer say this is a cycle and the economy will be better next year,” Pope said. “We have a lot to be optimistic about, but we don’t have the manpower to take advantage of those opportunities that we need.”

Gross domestic product

Gross domestic product is a “key” indicator of economic health, the report said.

“Between 2015 and 2021, state GDP shrank by 7.1%, the second largest decline of all 50 states plus the District of Columbia,” the report said.

At the same time, US GDP grew by 12.8%.

economy

Alaska’s gross domestic product shrank during the pandemic. Alaska’s most recent three-month measure of real gross domestic product was 7.7 percent below pre-pandemic levels, the lowest of all 50 states and the District of Columbia, the report said. At the national level, the gross domestic product was 4.8% higher in the same period.

Also Read :  Women's top financial concern is inflation, Fidelity study finds

Last year, Alaska’s GDP was $57.3 billion, the smallest of all states except Wyoming and Vermont, states with smaller populations than Alaska.

Employment growth

The report says Alaska ranks last in employment growth, just ahead of North Dakota.

“While the rest of the country experienced employment growth, employment in Alaska declined by 8% between 2015 and 2021,” the report said.

economy

In August, employment in Alaska was 3.9% below pre-pandemic levels, compared with a 0.2% gain nationally. Only Vermont, the District of Columbia and Hawaii ranked lower, the report said.

Unemployment

From 2017 to 2019, Alaska had the highest unemployment rate of any state and remained above the national average during the pandemic.

“Between 2015 and 2021, Alaska had the second-highest average unemployment rate at 6.5 percent, compared to 5.1 percent in the U.S. as a whole,” the report said. “Only Nevada fared worse 7.2%

“One surprising aspect of the pandemic recovery is the low unemployment rate across the United States,” it said. “As of September 2022, Alaska’s unemployment rate was just 4.4% — very low by historical standards, but still the fourth highest of all states and the District of Columbia.”

Net migration

economy

Every year from 2012 to 2021, more people have left Alaska than moved here, another sign of the shrinking economy.

“Alaska’s average annual net migration rate from 2015 to 2021 is the lowest of any state,” the report said.

During this period, Alaska lost about nine residents for every 1,000, while the United States gained about 2.2 residents for every 1,000.

Effect of oil

In the interview, Cloud talked about the wide impact of oil prices on the economy. He said prices coupled with low oil production compared to previous decades are affecting government revenue and the country’s gross domestic product. The rapid job losses in oil and gas companies have also seen only a modest recovery, eliminating many high-paying jobs that support other aspects of the economy.

Also Read :  Unlocking the full potential of women in the economy

“The relative weakness of oil prices is probably the biggest factor in all of these indicators,” he said.

economy

An unprecedented period

Cloud and Pope said the state’s economic performance is unprecedented, at least in recent Alaska history.

Popp said the net emigration of Alaskans has continued for an unusually long number of years. A lack of people moving to Alaska has been a major factor, a situation that can be addressed with proper investment in improving services in Anchorage and the state, he said.

“One problem is that our wages are not as strong as they used to be,” he said. “Many cities and states have reinvested in themselves, providing great schools, vibrant downtowns and community environments, and walkable neighborhoods—things younger generations are looking for. There’s a lot of competition for labor nationally, and it’s come full circle that we haven’t invested in ourselves.

Cloud said Alaska’s economy collapsed dramatically in the 1980s, but that decline was marked by a “slow, steady fatigue” of employment problems, people leaving the state and a decline in gross domestic product.

[‘Slow strangulation’: Alaska school districts face fiscal cliff with high inflation and flat funding]

A slow boil means many Alaskans are still doing well, he said.

But the consequences are compounded by affecting state investments in areas such as education that can improve quality of life and help keep people in Alaska, he said.

Some of the results of the state’s struggling economy are seen in the Anchorage school district’s proposal to close schools, declining enrollment, net out-migration and years of flat state funding for public education as a result of limited state revenues, Cloud said. .

“This data is known, but we saw value in bringing it together,” he said of the report. “Instead of providing scattered facts, we wanted to bring this information together to create a really clear picture of how our economy is doing.”

• • •



Source

Leave a Reply

Your email address will not be published.

Related Articles

Back to top button