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State economists predict Southeast job losses

Industry, economic development officials question negative forecast

Posted: Thursday, January 13, 2011

State economists are predicting Southeast’s economy will decline while the state as a whole grows, but some in industry are questioning that prediction.

The state’s 2011 Economic Forecast, released this week, predicts Southeast will lose 400 jobs this year, compared to a statewide prediction of an increase in 1,800 jobs.

The analysis was developed by the Department of Labor and Workforce Development’s Research and Analysis Section, and published in the January issue of “Alaska Economic Trends” magazine.

The prediction of losses in Southeast is based on continued demographic changes as the population ages, as well as what the department’s economists called “hesitant tourists,” both of which are likely to erode jobs in the trade, transportation, leisure and accommodations sectors.

That’s likely to cost Southeast jobs, despite healthy government, health care and mining industries, the economists said.

That’s not what some local tourism officials are anticipating, however.

“We’re cautiously optimistic,” said Lorene Palmer, executive director of the Juneau Convention and Visitor’s Bureau.

The national economy seems to be improving, and that may bode well for Alaska travel, she said.

“We are seeing consumer confidence come up a bit, and that's important when vacation decisions are being made,” she said.

Fred Reeder, with Cruise Line Agencies of Alaska, said cruise ship traffic to Alaska, most of which comes to Juneau, will be almost unchanged from last year. It is anticipated there will be about 7,000 more passengers this summer, up less than one percent.

Reeder, though, said the real key will be what cruise ship passengers do when they are here, but an improving economy may make them more willing to spend on shopping and additional excursions.

The Alaska Legislature reduced the cruise ship head tax last year at the behest of Gov. Sean Parnell, but that's too soon to result in cruise ship schedule changes this summer, he said.

“Clearly the head tax (reduction) is going to have some positive effects in the out years,” he said.

That’s likely to start helping in the 2012 season, said Wanatta Ayers, director of Economic Development in the Department of Commerce, Community and Economic Development.

She said she wasn’t surprised by the forecast for a poor tourism season this summer.

“This is consistent with what we expected for the short term,” she said.

“It’s why Governor Parnell supported right-sizing the head tax and increasing funding for tourism marketing last year. We’ve gotten commitments moving forward from cruise lines because of it. But these changes can’t happen that quickly,” she said.

State economists in 2010 predicted a loss of jobs in Southeast as well, but instead saw a slight gain.

“This tourism stuff is definitely difficult,” said Mali Abrahamson, Southeast regional economist for the state.

Slight decreases in government jobs are also anticipated in Southeast, though only in federal and local government jobs, no decreases are predicted in state government jobs. Southeast's population peaked in 1997, and has steadily declined ever since, she said. Abrahamson said that’s expected to steadily decrease in future years due to demographic changes as the population ages.

“The decline is largely going to come from historical trends,” she said.

• Contact reporter Pat Forgey at 523-2250 or patrick.forgey@juneauempire.com.



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