Alaska jobs forecast for 2018 improves from awful to bad

Alaska’s most significant recession since the oil bust of the 1980s appears to be abating.

In its annual forecast of the state’s employment picture, the Alaska Department of Labor and Workforce Development predicts that Alaska will continue to lose jobs in 2018, but at a lower rate than in 2017 or 2016.

“Generally speaking, we forecast that it’s going to be another year of moderate losses,” state economist Karinne Wiebold said by phone on Wednesday. “The job losses are slowing; we’re still losing jobs, but we’re not losing them at the same rate as we had.”

“The badness is weakening,” said Brian Holst, executive director of the Juneau Economic Development Council, summarizing the report.

Wiebold is the author of the statewide forecast published this week in the January issue of Alaska Trends, the economic journal published by the Department of Labor.

According to the forecast, Alaska is expected to lose about 1,800 jobs in 2018, or about half a percent of the state’s total.

That’s better than 2016, when the state lost 6,300 jobs, about 1.9 percent of its workforce, amid plunging oil and gas prices and cuts to state government. Figures for 2017 have not been finalized, Wiebold said, but preliminary figures show those losses moderated in 2017: 3,600 jobs, or about 1.1 percent.

Forecasts are based on a variety of data, Wiebold said, including information from employers, local conditions and educated guesses about what the Alaska Legislature might do with the state budget.

It isn’t an exact science: Last year at this time, the Department of Labor was pessimistically forecasting the state would lose twice as many jobs as it actually did. In 2016, the forecast was overly optimistic, calling for a drop of 0.7 percent.

Nevertheless, the Department of Labor estimate is the best available.

“I think they nailed it,” said Meilani Schijvens of Rain Coast Data in Juneau.

Schijvens studies the Southeast economy and said the state forecast matches what she knows of conditions locally.

This year, Wiebold said the biggest uncertainty is about how the Alaska Legislature will close the state’s multibillion-dollar deficit, which is estimated at $2.7 billion for the fiscal year that starts July 1.

A 2016 study by the Institute for Social and Economic Research at the University of Alaska Anchorage found significantly more job losses will result if the Legislature balances the budget with spending cuts instead of cutting the Alaska Permanent Fund Dividend or approving an income tax or sales tax. In all scenarios, employment is affected.

In addition to the statewide report, the Department of Labor created regional forecasts for Anchorage, Fairbanks and Southeast Alaska. In Anchorage, job losses are expected to be 0.7 percent. Fairbanks is expected to gain jobs, thanks to military-related construction. Southeast Alaska is expected to lose 0.6 percent, or 200 jobs.

Wiebold wrote the analysis for Southeast Alaska and said the region can expect to lose about 100 government jobs this year. The construction industry will also suffer, as the effects of state cuts to construction spending take hold.

Losses won’t be limited to those sectors of the economy: As fewer people have jobs in Southeast, there will be less money spent at retail stores and restaurants, leading to losses for those businesses as well.

Many sectors are expected to show flat employment, and the only sector expected to gain employment is health care.

Holst, by phone, pointed out that people looking at the report should keep in mind that the Southeast figures are not synonymous with Juneau. While the jobs forecast sees tourism employment plateauing across Southeast, Juneau is expected to see a record-high 1.15 million tourists in 2018, something that will improve the situation locally.

“It looks like we’re working our way through this. Despite the drag of the state recession, there are some positive winds coming from the national economy,” Holst said.


• Contact reporter James Brooks at james.k.brooks@juneauempire.com or call 523-2258.


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