Southeast Alaska saw a “stronger than expected” 6.5% increase in jobs in 2022 compared to the previous year, due to ongoing recovery from being one of the state’s hardest-hit region during the COVID-19 pandemic, according to Alaska Department of Labor and Workforce Development.
A slower 2.5% increase in jobs is forecast for 2023 due to a record cruise ship season plus growth in several industries including a continuing increase in construction and partial rebound of seafood processing.
Tourism-related industries and transportation had the highest rates of growth in Southeast Alaska as the region added 2,400 jobs instead of the 1,400 forecast in 2022, according to this month’s Alaska Economic Trends report. Seafood processing jobs saw the largest decline at 20%.
“Southeast’s rebound over the last couple of years was more dramatic than other areas, but its economy also suffered more than most in 2020 when the pandemic eliminated nearly two years of tourism and closed many businesses and schools,” the report states. “Jobs began to return in 2021, with gains in eateries, transportation, and seafood processing, and the recovery picked up steam in 2022.”
The 6.5% increase in total jobs is rosiest of three figures that arguably paint a picture of the region’s overall economic health. A comparison of total pre-pandemic employment in 2019 shows 0.5% more total non-farm jobs compared to the projected 2023 total, while the number of jobs in November of 2022 was 1.6% higher than the same month of 2021.
A graph shows Southeast Alaska employment rebounding strongly after one of the biggest declines statewide during the COVID-19 pandemic. State officials project the region will see continuing job growth in 2023, especially in tourism and construction, but at a slower pace than last year. (Alaska Department of Labor and Workforce Development)
While the November comparisons are a useful spot check based on the most recently available figures, the total job comparison between last year and the coming year is a better overall portrait, said Meilani Schijvens, director of Rain Coast Data, which publishes annual economic assessments for Southeast Conference.
“If you want to look at how the economy is doing looking at annual increases tells more of the story,” she said.
Among the most eye-catching numbers for Southeast Alaska in the report is the assumption there will be an all-time high of 1.6 million cruise ship passengers in 2023, which would mean 100% occupancy of ships. That’s more optimistic than the 1.4 million visitors local government and industry officials say is likely, which is based on occupancy rates that increased during throughout the season last year and peaked at about 80%, Schijvens said.
“The real answer is nobody knows for sure,” she said.
Seafood processing is expected to see the highest percentage increase in jobs in 2023 at 8.3%, but that’s less than half of last year’s drop. Schijvens said the region’s worst seafood harvest on record occurred during the pandemic, and noted pink salmon harvests tend to alternate up and down years, with the coming year expected to be an up cycle.
The state report notes the industry is among many likely beneficiaries of funding from the federal infrastructure bill, since it includes money for “maintenance and removal of fish passage barriers, which are important for salmon harvests.” Other regional benefits for the coming year and beyond include construction of ferries and Alaska Marine Highway terminal facilities, additional U.S. Coast Guard support including child care facilities in Sitka and Ketchikan, and “a reduction in the permitting timeline for critical mineral projects such as Bokan Mountain on Prince of Wales Island.”
The infrastructure bill, along with other federal funding such as the just-passed $1.7 trillion omnibus budget, is also why another of the fastest-growing workforces during the coming year is expected to be a 6.3% increase in professional and business services, Schijvens said.
“We’ve got a lot of federal money on the ground right now, so there’s a lot of local governments and groups that can go after funding,” she said. “It’s not just studies. You’ve got design teams, architect drawings and all these different pieces so you can show you’re ready to build a building or build a port.”
Other top regional employment growth industries in 2023 compared to 2022 are construction at 6.7%, and leisure and hospitality — generally related to tourism — at 7.1%.
The report predicts no industries in Southeast Alaska will see a decline in the number of jobs during 2023. Numerous zero-change industries are listed including mining, health services, private education, and state and federal government.
A chart shows Southeast Alaska employment increased roughly the same amount as the statewide average between November of 2021 and 2022. The figures provide a “moment in time” snapshot, and thus the 1.6% regional increase in November of each year doesn’t reflect the much larger year-long increase due to seasonal tourism employment. Also, there were significant variances both in statewide regions and within Southeast Alaska industries. In Southeast, for example, construction employment increased more than 14% while the information sector dropped 20%. (Alaska Department of Labor and Workforce Development)
The comparison of total jobs in 2019 and expected in 2023 shows some notably different and often more drastic shifts in industries. Construction jobs show by far the biggest increase at 14.3%, followed by professional and businesses services at 6.3%, and leisure and hospitality at 4.7%. The biggest drops were information at 20%, state employment (including the University of Alaska) at 8.5%, and health care at 3.6%.
The zero-growth projection in state and federal government during the coming year is actually a relative positive compared to a 25% drop in state and 18% drop in federal jobs during the past decade, according to the state’s report. Local governments in Southeast Alaska are also expected to remain at steady employment levels, at least in a practical sense.
“Local government employment will increase by 100 in 2023, but the change will probably be a technicality rather than growth because of the pending transfer of Wildflower Court, a private nonprofit nursing home in Juneau, from private to public ownership by Bartlett Regional Hospital,” the report notes. “Wildflower Court struggled with a nursing staff shortage and difficulty recruiting in recent years.”
Also singled out in the report is “the Juneau School District is unlikely to add jobs, as it faces a major budget deficit for 2023-2024.”
Statewide a 1.7% increase in total jobs is forecast in 2023, led by resource industries including oil, gas, mining and logging — each at or slightly above 5.5%.
“Mines weathered the pandemic downturn well, and their growth will come from small workforce expansions across the board,” the report states. “Oil and gas, on the other hand, was hammered during COVID, losing nearly a quarter of its jobs in 2020,” but the industry’s gradual recovery is expected to continue this year.
A 4.1% increase in leisure and hospitality, and 4% increase in manufacturing are the other leading growth industries statewide.
As with the Southeast region, the statewide forecast projects no employment declines in any industries. But zero or near-zero growth is forecast in the information, financial, education, health care and government categories.
While the report takes an optimistic tone in terms of the current economic recovery from pandemic lows and continuing (if slower) growth during the coming few years, it also notes “the easiest gains appear to be behind us.”
“In 2021, rebounds from pandemic lows came from reopenings and massive infusions of federal money through household stimulus checks, enhanced unemployment benefits, and direct support to businesses and state and local governments,” the report states. “Rising oil prices and strong Alaska Permanent Fund investment returns that year also lifted state revenue projections. In 2022, Alaska continued to add jobs as students went back to school, cruise ships returned in full, more people traveled and ate out, and oil prices climbed.
“This year’s gains will likely come in smaller amounts from a wider range of industries, as we expect all Alaska industries to grow or hold steady. Future restrictions and supply chain disruptions, especially from China, remain possible. Worker shortages, the rising cost of labor, and inflation also worked against recovery in 2022 and will cause ongoing friction in 2023.”
• Contact reporter Mark Sabbatini at mark.sabbatini@juneauempire.com
