Wrangell Sentinel -

By Dan Rudy 

By the numbers: Report highlights SE economy


New economic data for Southeast Alaska was unveiled at this year’s Southeast Conference in Prince Rupert, British Columbia (see adjoining article). The “By the Numbers” look was compiled for the regional association by Juneau-based analysts Rain Coast Data using information gathered by state, federal, industry and other sources.

The study looked at economic and demographic statistics for the period spanning from 2010 to 2014, when the latest information was available.

Examining the past five years, the study found the region to have added 2,616 people and around 1,500 jobs, respectively a four- and three-percent increase overall. The demographic which saw the greatest growth were the over-65 age group, which grew by more than a third over the five-year period. Seniors now comprise roughly 10 percent of the population in Southeast, up from about eight percent in 2010.

The study estimates there were around 45,700 total jobs in region in 2014, which also takes into account the public-sector and self-employment. As a whole, earnings for the year were $2.17 billion, with private self-employment earnings making up more than 19 percent.

Labor gains came largely from the visitor and maritime sectors. The visitor industry saw the addition of 1,033 jobs, an 18-percent increase. Growth there was accompanied by a rise in air and cruise passengers arriving in Southeast. Passengers arriving by the state ferry system declined slightly, however, by four percent. Overall, there were 1.85 million visitors to the region in 2014, up from 1.72 million in 2010.

Commercial fishing and seafood processing grew by 406 jobs, and workers in that sector saw a 24-percent increase in wage earnings as well. The wider maritime economy, which takes private and Coast Guard employment into account, saw the addition of 861 jobs between 2010 and 2014. Wages in that sector had that largest increase of any measured, at 29 percent. By comparison, over the five-year period job earnings across all sectors rose from $1.9 billion to $2.2 billion, a 14-percent rise.

Government employment—representing around 30 percent of all jobs in the region—declined slightly over the measured period. Some 260 state, federal, tribal and local positions were lost, with US Forest Service jobs representing the largest percentage. This continues a trend of decline since 2004, with 570 federal jobs lost over the past decade.

Despite this, combined wages for public employees rose by 10 percent, from $696.7 million to $765.8 million. Employment losses were somewhat mitigated by the addition of Coast Guard members to the area.

While the past five years have been largely positive, the next year could be a challenge for the region. Of biggest concern is Alaska’s deficit, tied to sharply declining oil prices in the past year. Projecting a $7.7 billion budget deficit over the next two years, the state will need to take drastic action to avoid depleting its savings, which could be gone in just four years. Of significant concern to communities in Southeast will be the continuation of the Alaska Marine Highway Service, its state-run lifeline.

Despite this, things aren’t completely gloomy. A 2015 Business Climate Report accompanied the release of the study, using information collected from 416 proprietors and managers from 29 communities in Southeast.

The report found that 38 percent of those surveyed expected the outlook for their business or industry to improve. The visitor, food and beverage industries were the most upbeat, as were those businesses located on Prince of Wales and in Skagway and Hoonah. Slightly higher than the average, 48 percent of Wrangell respondents felt things were going to improve.

On the other hand, 19 percent of those surveyed anticipated the business climate to worsen. Primarily these were involved in the timber, construction and healthcare industries, whose earnings have either flattened or declined. Businesses located in Angoon, Metlakatla and Ketchikan were also more likely to have a negative outlook. Two-fifths of respondents expected their business climate to remain the same.

Viewed more broadly, this year’s commercial outlook looks brighter than it did in 2010. Asked how they viewed the overall business climate in Southeast Alaska, scarcely half of respondents then felt conditions were “good” or “very good.” Asked the same in 2015, 67 percent felt things were going well. Of the 27 businesses surveyed in Wrangell, 20 of them replied that conditions were good or better.

The survey found that those involved in the transportation, utilities, construction, tourism and health sectors reported the most positive assessments of the regional economy, while those in the visitor industry were most likely to call it “very good.” By contrast, the outlook for the timber and forest products sector was reported as overwhelmingly negative by four of six businesses surveyed.

Factors affecting respondents’ positivity included quality of life, recreational and cultural opportunities, entertainment and access to natural resources. The costs of conducting business, particularly freight, were considered the biggest impediment to commerce in Southeast by far. Travel costs were considered a complete barrier to business for the timber industry in the survey, while real estate was considered such by 86 percent of respondents involved in the food and beverage industry.

The study further breaks down survey data by region and demographics, as well as investment ranges and how education impacts workforce readiness. Links to both reports will be made available through the SEC website after the conference wraps up today, at http://www.seconference.org.


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