Report: Southeast economy poised for downward swing

Southeast Alaska’s economy appears to be entering a stormy season.


That’s the conclusion of a new report completed by Rain Coast Data and the Southeast Conference. Meilani Schijvens of Rain Coast Data revealed the report at Thursday’s Juneau Chamber of Commerce luncheon. It had its debut at the annual Southeast Conference meeting earlier this month.

“Data from the last year, especially, indicates economic contraction,” she told the Chamber. “In the last year, there were few areas of growth, and many indicators trended slightly downward.”

While the tourism industry is a bright spot — it has added more than 1,000 jobs over the past five years, according to Schijvens’ data — depressed seafood prices, low mineral prices and government job losses are undercutting gains in other sectors.

Those factors appear to be ending Southeast Alaska’s post-timber recovery.

From 1991 through 2007, Southeast Alaska endured a steep economic decline as the timber industry was slashed under environmental and federal pressure. In 1991, Southeast Alaska boasted 3,543 timber industry jobs. In 2014, there were just 328, the lowest figure since 1890.

“The adverse economic consequences worked their way out by 2007,” Schijvens explained. “From 2008 to 2012 we were finally back on track, and this rise was nothing short of exhilarating.”

Now, however, the economy has plateaued, and there are signs of a downward dip.

In 2014, the latest full year for which figures are available, government jobs accounted for 35 percent of all wages paid in Southeast Alaska. The first months of 2015 showed a loss of 160 government jobs of all kinds (state, local, federal and tribal), and with oil prices in the cellar and lawmakers calling for more cuts, “economists expect these losses to continue,” Schijvens’ report states.

Schijvens also found steep job losses in the health care industry in the months before Gov. Bill Walker approved Medicaid expansion in July.

The health care industry employs about 3,300 people in Southeast Alaska, and Schivens found about 70 health care jobs were lost in 2014 and another 100 were lost in the first seven months of 2015.

“Medicaid expansion is expected to have a significant and positive impact on regional healthcare employment levels,” Schijvens wrote.

This year is also the last with a large number of major construction projects, and construction employment has already begun to fall. In 2014, Southeast lost 100 construction jobs; another 100 are expected to be lost this year.

On the brighter side, the U.S. Coast Guard now employs 700 people in Southeast Alaska — a notable exception to the downward trend in government employment — and the tourism industry is continuing to add jobs as more visitors travel to Southeast.

This year is expected to set a record for the number of Juneau arrivals by air, Schijvens said, and if current trends continue, 2018 will bring a record number of cruise ship passengers.

Perhaps because of the health of the tourism industry, a survey of 416 business owners and managers found that 38 percent believe the economic outlook for their business is improving. Forty-three percent said the outlook is flat, and only 19 percent had a negative view.


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