The two-armed economists at Northern Economics prepared the 2011 annual economic forecast for the World Trade Center Alaska. The summary from their March 2011 newsletter: "We expect that 2011 may be very much like 2010. In general, we see Alaska entering an era of slower growth with significant question marks about the state’s ability to generate significant long-term growth without a gas pipeline or changes in the investment atmosphere. For 2011, we think that Healthcare and Private Education will continue to lead the way as measured by job growth. Investment in the oil patch is likely to remain flat. However, investment in mineral exploration and mine development will continue to be strong. Construction is likely to be driven by public funds as private funding takes a breather. In general, the short-term outlook is stable as long as high oil prices continue to mask the state’s declining oil production. The longer term is considerably more difficult to forecast.
"In terms of GSP, officially we predict the measure to be essentially flat overall, but we think there is the strong chance for GSP growth to outrace our official predictions. We use the State of Alaska Department of Revenue’s official predictions for average oil prices in our analysis. However, the U.S. Energy Information Agency (EIA) is predicting average oil prices that are nearly $10 per barrel higher than the State of Alaska’s more conservative estimate. If oil prices are closer to the official State of Alaska estimate, then we will see a four percent decline in GSP from the Natural Resources supersector, and our prediction calls for largely offsetting gains in other sectors for a total prediction of a 0.4 percent decline in GSP. On the other hand (we’re economists; there is always another hand), if oil prices are closer to the EIA’s prediction for 2011, averaging in the low $90s per barrel range, then GSP will likely increase by four to six percent overall this year. If this second case occurs, then Alaska will set a record for highest GSP ever. Apart from the Natural Resources supersector, we anticipate slight upticks in GSP attributable to Trade (two percent gain), Hospitality and Leisure (one percent gain), and Health and Education (four percent gain). We expect Transportation and Utilities, Construction and Manufacturing, Government, and Finance and Other Services to remain flat.
"As noted in our introduction, we are predicting a one percent gain in jobs this year. We expect Healthcare and Private Education employment to be up more than five percent this year, the largest gain expected for any supersector. We think that the Natural Resources supersector, led primarily by mining and fisheries, will be up roughly 1.7 percent. We predict Wholesale and Retail Trade employment to increase 1.5 percent. We predict the remaining sectors will experience less than one percent growth and we think there’s a possibility that overall Government employment could fall very slightly this year."