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State releases economic forecast

Mining in Southeast expected to level off, tourism to increase

Posted: January 3, 2014 - 1:07am

Employment in Alaska is expected to grow by 0.4 percent in 2014, according to the Alaska Department of Labor and Workforce Development. Southeast Alaska should also see a slight increase of jobs at 0.3 percent, despite a decline in government jobs.

The department released the economic forecasts Thursday as part of its monthly Alaska Economic Trends publication.

While 2014 is expected to be the fifth straight year of increased employment statewide, this year’s growth is lower than the state’s 10-year average, state economist Caroline Schultz noted in the forecast.

“Shrinking government employment is a major reason for this tempered forecast,” Schultz wrote. “Government has traditionally provided slow but steady job growth in Alaska, but several years of cuts — mainly federal — have put a damper on overall job growth.”

Federal employment in Alaska has been declining since 2011; Schultz points out that with sequestration and increased scrutiny in Washington D.C., the decline will most likely continue. Most of the job losses in 2014 will be in the government sector. Of the 900 government jobs expected to be lost, 600 of those are expected to be federal.

“... This is assuming agencies won’t be forced to enact severe layoffs,” Schultz wrote.

State government jobs increased by 200 in 2013, but employment in that sector is expected to remain flat this year. Military-related construction is expected to decrease in 2014.

Alaska’s heath care industry is expected to grow by 1.2 percent, which is the same rate predicted for 2013. Between 2009 and 2012, health care jobs grew each year by at least 4 percent. Schultz writes that as a result of the Affordable Care Act, there might be increased demand for health care among some populations. She also notes that while Alaska’s population has traditionally beeen younger, the number of those who are 65 and older is expected to increase by more than 20,000 between 2010 and 2015.

Jobs in energy and mining are expected to continue increasing this year, with the oil industry responsible for most of the growth.

The forecast for Southeast’s economy is similarly modest. The region is expected to add about 100 jobs in 2014.

“Relatively small government job losses will mostly offset scattered private sector gains,” state economist Mali Abrahamson wrote.

The three main factors expected to impact the Southeast economy is a lack of population growth, more retirement-aged workers and slow recovery in a few private sector industries.

Southeast’s population of those between the ages of 25 to 54 has increased slightly since 2008, after several years of significant decreases. This year the decline is expected to continue. The population of those older than 55 is expected to increase by more than 1.5 percent. Health care jobs in the region are expected to decrease by 1 percent, despite an older population.

Despite slight growth in mining jobs statewide, jobs in Southeast may have leveled off. Exploration and development costs in Southeast totaled $121 million in 2013, according to recent estimates by the Department of Natural Resources, and no new mines are slated to open this year. Most of the recent increase in Southeast mining jobs is attributed to the Kensington Mine.

An extra 100 jobs in Southeast’s leisure and hospitality industry are expected. An expected 100 new transportation and trade positions may help that industry get back to its peak of 7,800 jobs in 2008.

• Contact reporter Jennifer Canfield at 523-2279 or at jennifer.n.canfield@juneauempire.com. Follow her on Twitter at https://twitter.com/canfieldjenn.

 

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