Alaska’s gross state product — the total economic output of the state — will decline slightly to $49.2 billion in 2014 from 2013’s $51 billion, according to an economic forecast by Northern Economics.
The Anchorage-based company’s vice president, Marcus Hartley, presented the predictions at the annual Juneau Chamber of Commerce Economic Forecast Luncheon on Thursday at the Westmark Baranof Hotel.
The forecast showed Alaska’s economy staying “pretty flat,” Hartley said after the presentation.
Hartley predicted a slew of Alaska’s industries gaining jobs in 2014. The natural resources industry will gain 200 jobs; transportation, 100; construction, 200; wholesale and retail, 700; and health care and private education, 950. The hospitality and tourism industry will gain 600 jobs, the forecast predicted, because of the improved economy in the lower 48, Hartley said.
The financial and professional services industry will lose 1,600 jobs, Hartley said. Government jobs will drop by 700, according to the prediction. Overall, Northern Economics predicted a statewide increase in jobs by 450, or .1 percent, in 2014.
Hartley said the original forecast based on the model the company uses was more pessimistic than what Hartley ended up presenting. He said that with “government spending and the oil field, we don’t think it’s as bad as the trend indicates.”
“If we’re too optimistic, that might spur things that aren’t real,” he said. “And if we’re too pessimistic, that might have an effect, too.”
Last year, Northern Economics predicted for 2013 that Alaska’s GSP would stay flat from 2012 at $53 billion, and that employment would be up by 1.3 percent. In reality, GSP dropped to $51 billion and employment increased by only .5 percent. Most jobs were lost in the public sector, Hartley said.
Hartley said his forecast was “not terribly off-base with what the Department of Labor says.” The Alaska DOL released its economic forecast earlier this month.
DOL Chief of Research and Analysis Dan Robinson said although there are some differences in employment predictions between the two forecasts, “what I saw today (at the luncheon) wasn’t meaningfully different than what our economists put together for our forecast.”
The state expects “mild growth” of the economy in 2014, Robinson said. Differences in employment numbers can be mostly chocked up to differences in the way Nothern Economics and the state define employment — the private firm includes self-employment in its counts, the government does not, he said.
“If they say a growth of a 1,000 jobs and we say 800, that’s because we’re forecasting two different things,” Robinson said.
The Northern Economics forecast and the state’s forecast did agree that government job loss has been affecting economic growth in Alaska.
“We agree the private sector is fairly healthy,” Robinson said. “Well, healthy’s kind of a strong word. It’s creating jobs. It’s the government side and especially the federal government side that’s a drag right now.”
The state expected employment to grow by .4 percent in 2014, the fifth straight year of increases, according to the report.
Hartley noted that the two predictions are more similar than they are different, and that most of the differences lie in the individual industry predictions.
He also thought it was interesting that the state predicted a loss of 900 government jobs, while he predicted a loss of 700. Conversely, the state predicted a gain of 400 professional services jobs — the industry under which Northern Economics falls — while the company predicted a loss of 1,600 jobs in that industry.
“It might be that where you are you see the implications of the situation a little differently,” Hartley said.
Also at the luncheon, World Trade Center Alaska’s Greg Wolf gave a presentation on Alaska’s international export economy. In 2013, international trade brought $4.5 billion in “new money” — nearly 10 percent of Alaska’s GSP — to the state, Wolf reported.
Alaska ranks 40th in the country in exports by value, Wolf said. But that’s with an industry population of about 70,000, without a significant agricultural sector or a significant manufacturing sector, he said.
In terms of international exports as percent of GSP, Alaska comes in 14th in the country. In terms of international export dollars per capita, the state comes in fourth.
“That means trade is more important to me and you than people living in other states,” Wolf said.
International exports have been a consistently and “quietly growing” part of Alaska’s economy for the last 20 years, Wolf said. Alaska’s biggest trade partners are China, with 28 percent of exports going to the burgeoning country, followed by Japan, South Korea and Canada. In 2013, seafood made up 52 percent of Alaska’s exports. In the 26 years Wolf has been studying the Alaska economy, seafood has always been the state’s main export.
He predicted that untapped resources such as coal, lead, zinc and copper will be the next frontier for Alaska exports, and will give the economy a boost. He also expects more countries to seek out Alaska as a trade partner in the future.
“International trade is big business for Alaska,” Wolf said.
The Alaska DOL economic forecast can be found online at labor.state.ak.us/trends/jan14.pdf.
• Contact reporter Katie Moritz at 523-2294 or at firstname.lastname@example.org. Follow her on Twitter @katecmoritz.