Alaska is expected to have moderate job growth in 2025, with the construction and oil and gas sectors forecast to be the big winners and seafood processing seen as the biggest loser.
Statewide job growth is forecast to be 1.6%, with 5,300 jobs added, according to the analysis published in Alaska Economic Trends, the monthly magazine of the Alaska Department of Labor and Workforce Development’s research and analysis section.
Alaska’s rate of job growth slightly outpaced that of the rest of the nation starting in 2023, and that is expected to continue this year.
“Alaska is still pretty steady as she goes, as far as how many jobs we’ve been adding back every year, but nationally it’s slowed down,” said Karinne Wiebold, the state labor economist who wrote the article detailing the statewide employment forecast. The rest of the nation emerged from the COVID-19 pandemic a little quicker than Alaska did, she said.
The dominant job-growth sector — construction — will continue to have robust increases this year, thanks in large part to federal funding from the Infrastructure Investment and Jobs Act of 2021, according to the forecast. Another 1,500 jobs, a 7.9% increase, is expected this year in that sector, according to the forecast.
Overall, by the end of the year, Alaska construction employment is expected to have grown by over 25% from 2019 to 2025, the forecast said.
The health care sector, one of the state’s biggest employers, is expected to gain 1,000 jobs, or a 2.9% increase over 2024, the forecast said.
The oil and gas sector is expected to gain 600 jobs in 2025, for an increase of 7.4% from 2024 levels. Total employment in the sector is expected to average 8,700 jobs a month.
Still, that is below the 9,900 average monthly oil and gas jobs in 2019 and well below peak employment in that sector in 2014, which averaged over 14,000 jobs.
Wiebold said Alaska oil and gas employment and the industry’s situation in general have been volatile in recent years, with the pandemic playing a role. The decline after 2014 signaled the start of an Alaska recession, though oil and gas jobs started to rebound in 2019. “And then 2020 changed the demand so much for oil that everything just kind of turned a little bit on its head,” she said.
Possibly affecting employment now is the mature state of many fields, which may not need as many people to operate as they did in the past, she said.
The seafood industry, which dominates Alaska’s manufacturing sector, is forecast to be the biggest job loser this year.
Statewide, the manufacturing sector is expected to have 5% fewer jobs in 2025 than in 2024, according to the forecast. That would follow a 6.3% decline in 2024 from the year prior, according to the department.
Seafood processing, like the seafood industry as a whole, is facing difficult straits, with plant closures or operation reductions, low prices and, in some cases, dwindling fish runs. Those problems are not expected to be alleviated in the immediate future, according to the forecast.
Other constraints on Alaska’s employment and economic picture could come from federal budget cuts, the forecast said.
Wiebold said budget cuts should not affect federally funded infrastructure projects – for now. Money from the infrastructure bill has already been allocated, she noted.
However, that infrastructure funding is not unlimited, and there will be a sunset eventually, she said. “This is a discrete period of time,” she said.
Federal budget cuts could hurt Alaska employment in other ways, she said. Officials with the incoming Trump administration have expressed plans for big cuts in the federal workforce. That affects Alaska, where federal government jobs are important in the economy, she said.
“It might take a little bit, but there are going to be downward pressures on federal employment in Alaska,” she said.
Dan Robinson, chief of the department’s research and analysis section, cited the fundamental challenge that threatens economic growth in Alaska: shifting demographics.
“We’ve got some economic trends that are creating job growth. But unfortunately, too, we’ve got this long-term issue,” he said.
Between 2013 and 2023, Alaska lost 34,000 residents in their prime working ages, 18 to 64, Wiebold’s article noted.
That is a cloud hanging over the state’s economic future, the expected 2025 growth notwithstanding, Robinson said.
“We would have more growth available to us if the workforce issue weren’t the constraint that it is,” he said.
There are multiple reasons for the losses.
The state just completed its 12th straight year of net outmigration – with more people moving out of the state than moving in, by far the longest such streak on record. Several factors are combining to make the state less attractive to potential newcomers, Robinson said.
“Nobody should forget that there’s something that’s off a bit in the desirability of people to make Alaska their home,” he said.
Alaska’s population is also aging rapidly. Though Alaska’s population is younger than those of most states, it is aging the fastest, by some measures. The per-capita senior population grew faster in Alaska than in any other state, and the number of Alaskans 60 and older increased by two thirds from 2010 to 2022, according to state officials’ analysis.
Birth rates have slowed over recent years, meaning fewer young Alaskans growing into ages when they can hold jobs, the forecast noted.
The Alaska Economic Trends January issue also describes how employment patterns are expected to vary by region in the coming year.
Anchorage, for example, is not expected to gain any oil and gas jobs, even though employment in that sector is forecast to increase significantly.
“We see these being oil field jobs, not headquarters, which is more of how you think about Anchorage,” Wiebold said. Additionally, the role of the state’s biggest city as an oil and gas headquarters has changed in recent years, she said. One big factor was Hilcorp’s acquisition of BP assets, which ultimately shrank the city’s oil industry workforce, she said.
In the Fairbanks North Star Borough, the transportation, warehousing and utilities sector is expected to have the biggest percentage increase in jobs, at 8.3%, according to an article in the magazine focused on that community. Fairbanks is a regional hub, and Amazon has opened a facility there, notes the article, also written by Wiebold.
In Southeast Alaska, tourism is the bright spot for expected job growth, according to an article focused on that region and written by Robinson. Employment in the leisure and hospitality sector is expected to grow by 6.5% in 2025, and the 300 jobs in that sector represent half of the expected 600 new jobs in the region this year.
Alaska had a record cruise ship year in 2024, with the number of visitors now estimated at about 1.8 million, according to industry data used for the forecast. Near-record cruise visits are expected this year, according to the forecast.
The 1.8 million figure is higher than totals reported previously. The revision comes from information from the industry about more passengers being carried aboard each ship, with higher occupancy rates in berths, Wiebold and Robinson said.
Construction employment is expected to grow in Southeast Alaska, according to the forecast. But the impact has been a bit muted compared to the rest of the state.
Robinson said the Infrastructure Investment and Jobs Act has had less effect up to now on Southeast Alaska than on other parts of the state, for reasons yet to be understood. And much of the construction growth expected in the near future is related to North Slope oil development, which has some effect on Anchorage and Fairbanks businesses and jobs but does not really touch the Southeast part of the state, he said.
• Yereth Rosen came to Alaska in 1987 to work for the Anchorage Times. She has reported for Reuters, for the Alaska Dispatch News, for Arctic Today and for other organizations. She covers environmental issues, energy, climate change, natural resources, economic and business news, health, science and Arctic concerns. This article originally appeared online at alaskabeacon.com. Alaska Beacon, an affiliate of States Newsroom, is an independent, nonpartisan news organization focused on connecting Alaskans to their state government.
