Wrangell businesses less optimistic about economy than Southeast neighbors

Nearly two-thirds of the 440 Southeast Alaska business leaders who responded to a spring survey said the region’s overall business climate is good, the highest positive rating since 2017.

It’s a strong turnaround from last year’s survey when 80% called the business climate “poor” or “very poor,” amid the second year of pandemic limitations on travel.

Businesses in Wrangell were not as optimistic as other Southeast communities. Whereas the Southeast average was 62% who rated the economy as good or very good, Wrangell came in at 48% good and 48% poor, similar to Ketchikan’s survey results.

More than one-third of Wrangell businesses reported a generally negative economic outlook for their business or industry.

“Wrangell businesses have a tremendous amount of uncertainty, with nearly half of all businesses unsure if they will add or cut jobs in the next year,” according to the survey report.

Some of the strongest optimism came from Sitka, Hoonah and Petersburg.

Juneau-based Rain Coast Data conducts the annual survey for the Southeast Conference, an organization of municipalities and businesses from throughout the region.

The survey was conducted in April and May.

The lower numbers in Wrangell don’t surprise Carol Rushmore, the borough’s economic development director. The spring survey came before businesses knew whether the summer would show a recovery of the pandemic years of 2020-2021, she said.

“This summer has turned out to be decent,” Rushmore said last Thursday. “I think there would be a difference (in the survey) now.”

Even with a good summer, she acknowledged that businesses continue to face a shortage of workers and the community continues to deal with a lack of housing.

The lack of workers is not a problem unique to Wrangell. “I don’t know of a single organization that is fully staffed and not looking for employees,” said Robert Venables, executive director of the Southeast Conference.

He called labor shortages and high fuel prices “storm clouds on the horizon” that could rain on business owners’ optimism.

Setting aside the problems of hiring staff and paying fuel bills, Venables said he was “a little surprised at the magnitude of the optimism” in the survey responses. However, he believes it is a valid number. “One thing about business owners is they have the best fingers on the pulse” of their communities,” he said.

Survey respondents across Southeast listed limited housing availability, rising freight costs and high construction costs as the biggest barriers to business growth.

Almost 70% of survey respondents said home prices are too high for their staff, and 63% say rental prices also are too high. About the same numbers said there are not enough homes on the market to attract and retain workers, or enough rentals to meet the housing needs of their workforce.

In Wrangell, 86% of survey respondents said there are not enough homes available for purchase to attract and retain workers.

 

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