Alaska's economy should begin to see improvement later this year, top economic watchers told the Juneau Chamber of Commerce on Thursday.
"Alaska's economy should begin to recover late in the second quarter, or early in the third quarter, at the latest," said Jonathan King, senior economist at Northern Economics, speaking to a packed house at the Baranof Hotel as part of the Juneau Chamber of Commerce's annual economic forecast discussion.
King was joined by Gary Schlossberg, a senior economist at Wells Capital Management, in predicting a strengthening economy.
The economy's periods of stronger growth tend to be while it is coming out of a recession, Schlossberg said. "Not that we're predicting a boom by any means."
The improvement will be modest, King said, but that's in part because the recession in Alaska wasn't as bad as the national recession.
"We, as a state, really dodged a bullet," he said.
The job losses in Alaska were only one-third as bad as the U.S. as a whole in proportion to the size of the national economy, King said.
That's largely because Alaska's big industries, such as natural resources development, remained strong. Alaska also started the recession with less reliance on service, manufacturing and construction jobs compared to the rest of the country.
"We are fundamentally different from the U.S. economy," King said.
Those differences between the Alaska and the U.S. economy meant that when that national unemployment rate shot past Alaska's last year, it went up substantially less in Alaska. That left the state in the historically unusual position of having a lower unemployment rate than the national average.
While construction jobs declined significantly, the important tourism industry declined only 2 percent in Alaska.
King said his numbers differ from those of the state's Department of Labor and Workforce Development, which has reported a loss of 5 percent. The states figures are calculated differently and don't include self-employed workers, such as those in the tourism industry who own their own businesses, he said.
"The sole proprietors hung on better than the wage and salary workers," such as those at hotels, he said.
Still, King said, the tourism industry overall was down.
"It was a tough summer," he said.
Schlossberg said he's seeing signs of increasing confidence in companies about their business prospects. That's only just being hinted at in employment numbers as temp firms grow as companies seek the flexibility of using temp workers as a way to expand.
As the economy strengthens more, people will start spending more, furthering the economic expansion, Schlossberg said.
"The people with jobs are becoming a little less insecure about the outlooks," he said.
Schlossberg's prediction for a stronger economy had a slightly longer time frame that did King's, with Schlossberg predicting a rebound in the "next 12 months or so."
Possible factors that bode well for Alaska, he said, was that while some economic activity may be lost forever, areas such as tourism will probably just be delayed, and once consumer confidence returns people will resume taking travel vacations.
Schlossberg said he was expecting a 3 percent growth rate for the recovery, down from the 4-5 percent rate of previous recoveries in the 1970s and 80s.
Contact reporter Pat Forgey at 523-2250 or firstname.lastname@example.org.