Alaska Progress Report

Alaska's April 2012 unemployment rate was 6.9 percent

From the Alaska Department of Labor: "Alaska’s seasonally adjusted unemployment rate for April was 6.9 percent, essentially unchanged from 7.0 percent in March. The comparable national rate was 8.1 percent, down one-tenth of a percentage point. The U.S. and Alaska rates have both declined gradually but consistently in recent months, although unlike Alaska’s rate, the U.S. rate remains signifi cantly higher than pre-recession levels.

"Job numbers show the same pattern. U.S. employment is still about five million below its January 2008 peak, while Alaska quickly recovered after the mild job losses of 2009. Preliminary estimates for 2012 show a continuing trend of modest job growth in Alaska. Unemployment rates around the state, which are not seasonally adjusted, fell in all but one region in April as the labor market geared up for summer. Juneau’s rate of 4.8 percent was the state’s lowest, and the Wade Hampton Census Area’s was highest at 21.4 percent. Rates tend to decline over the spring and summer as many Alaskans take seasonal jobs in fi shing, seafood processing, construction and tourism."

2012 Resource Extraction 10-Year Project Projection

It's a project projection, it's a project projection! From the Anchorage Economic Development Council comes the 2012 Resource Extraction 10-Year Project Projection, a review of "...over sixteen oil, gas and mining projects in the state over the next ten years and the economic impacts of these projects."

From the executive summary, compared to last year's report, "...very little has changed other than another year has gone by with only slight progress in moving the described projects forward. In effect, the opportunities and benefits those projects represent for Alaska’s economy moved another year or more away from reality... As was the case in 2011, AEDC’s perspective on the outlook for these projects is not optimistic. Alaska’s competitiveness in the global markets within which we compete, is not favorable in many ways... social compact, taxation, ermitting, litigation, commodity pricing, high costs related to project development and access to needed infrastructure have reached a point of, what is effectively, gridlock for many proposed projects. Compounding these challenges is a clear lack of agreement among Alaskans on a common vision for Alaska’s economic future."

Alaskans not agreeing on a common vision? We're shocked, shocked and appalled (we're neither).

Construction spending to rise in 2012

The latest research from the Institute of Social and Economic Research predicts a sunny outlook for construction spending in 2012 in Alaska:

• The total value of construction spending “on the street” in Alaska in 2012 will be $7.7 billion, up 3% from 2011.
• Wage and salary employment in the construction industry will be stable at the same level as last year—15,800. This is down from a peak of 18,300 in 2005.
• Excluding the oil and gas sector—which accounts for 41% of the total—construction spending will be $4.6 billion, up 4% from 2011 and about the same rate of increase as last year.
• Oil and gas spending will be $3.2 billion, 1% higher than in 2011.

The report spotlights how important construction is to the economy: "Annual wage and salary employment in the construction industry in 2011 was about 16,000 workers, with average annual payroll of $70 thousand per worker, second only to mining (including petroleum). But that figure doesn’t include the “hidden”  construction workers employed in other industries like oil and gas, mining, utilities, and government (force account workers). In addition, it does not account for the large number of self-employed construction workers—estimated to be about 9,000 in 2011."

North Slope employment at all-time high, 35 percent nonresident

Alaska consultancy McDowell Group has released Oil and Gas Industry Employment on Alaska's North Slope. Findings from the executive summary are in three sections:

"Total Employment:

• On a monthly average basis, North Slope oil industry employment climbed to an all-time high in 2011. Employment averaged just under 9,000 jobs through November, about 500 jobs more than in 2010.
• North Slope oil and gas industry employment more than doubled over the past ten years, adding 5,000 jobs since 2000.
• Reports of declining North Slope employment in 2009 were accurate. Over an 11-month period beginning in December 2008, North Slope employment fell by 1,200 jobs, a 13 percent decline, before returning to a growth trend.

"Work Activity:

• Rapid growth in North Slope employment has occurred while oil production continues its steady long-term decline. Oil prices rising to record levels incentivized new development activity and projects aimed at enhancing recovery from mature fields. Historically high oil prices, coupled with necessary major investment in renewal of the aging Prudhoe Bay infrastructure, are primary drivers of the recent rise in North Slope employment.
• Reported North Slope-related spending totaled $4.9 billion in FY2011, marking at least the fourth consecutive year in spending growth (earlier comparable data is not available). Since FY2007, annual spending has increased by about $1.3 billion.
• Though North Slope industry-wide data is not available, North Slope oil producers report significant shifts in spending for maintenance at core fields. For example, one key firm (ConocoPhillips CPAI) reports that annual gross maintenance spending at Prudhoe Bay, Kuparuk, and Alpine is $800 million more per year than it was five years ago while development spending is unchanged.

"NONRESIDENTS IN THE NORTH SLOPE LABOR FORCE

• According to the most recent estimates, 35 percent of North Slope oil and gas industry workers are nonresidents. This percentage has been relatively steady over the past few years, and was at a four-year high of 37 percent in 2006.
• Nonresidents accounted for 56 percent of all North Slope oil and gas industry new-hires during the third quarter of 2010, the highest nonresident new-hire rate in any quarter in the 2004 to 2010 period. New-hire data reflects the number of job openings that occurred during the quarter, either through new job creation or turnover. It is not a measure of overall job growth.
• The 2010 annual nonresident new-hire rate was 44 percent, also the highest annual rate in the past seven years. The second highest rate was 40 percent in 2008.
• This nonresident new-hire data indicates an uptick in nonresident participation, but the overall increase is likely to be within historical norms. Nonresident new-hire rates are typically higher than overall nonresident participation rates because short-term, seasonal jobs are more often filled by nonresidents.
• Resident and nonresident oil and gas industry workers on the North Slope earn about equal wages."

December unemployment at 7.3 percent

From the Department of Labor: "Alaska’s seasonally adjusted unemployment rate remained unchanged in December, at 7.3 percent. The comparable national jobless rate for December was 8.5 percent, down from 8.7 percent in November. Both rates were lower than a year ago, when the national unemployment rate was 9.4 percent and Alaska’s was 7.9 percent.

"Not seasonally adjusted unemployment rates increased in all six of the state’s regions, as they typically do in December. Rates were lower than December 2010 in four regions, about the same in the Northern Region, and noticeably higher in the Southwest Region. The largest increases in Southwest were in the Aleutians East Borough and in the Aleutians West and Wade Hampton census areas.

"Nineteen of 30 areas in the state had unemployment rates in the double digits, and fi ve of those exceeded 20 percent — not unusual for Alaska in the winter. Rates were highest in Skagway and the Aleutians East Borough, whose economies are tied to fi shing and tourism and/or suffer from a lack of year-round employment opportunities. The areas with the lowest rates tend to be the state’s larger communities, where seasonal employment is less pronounced.

"Wage and salary employment continued its typical seasonal decline in December, with job counts falling the most in construction and manufacturing, which is mostly seafood processing. Job numbers were below December 2010 levels, but the preliminary estimates are subject to potentially large revisions."

Alaska lands more than half of nation's seafood

From the November 2011 Alaska Economic Trends: "Alaska produces a massive amount of seafood each year. The most recent data from the National Marine Fisheries Service show that in 2010, 53 percent of domestic harvested poundage came from Alaska — 4.35 billion pounds of product worth $1.6 billion. Dutch Harbor/Unalaska led the nation that year for pounds harvested, and in dollar value was second only to New Bedford, Mass.

"Harvesting employment was distributed among the following fisheries in 2010: salmon (50.2 percent), halibut (20.1 percent), groundfish (8.1 percent), sablefish (7.4 percent), crab (5.4 percent), herring (4.9 percent), and miscellaneous shellfish (3.9 percent). Average monthly fish harvesting employment has declined nearly every year since 2005 and in 2010, hit its lowest level since the data series was created. In 2010, there were 6,915 harvesters working each month on average, a decline of 2.4 percent from the previous year and down 7.6 percent from 2005."

Alaskan women earn 67 cents to a man's dollar

From the October 2011 Alaska Economic Trends: "On average, women in Alaska earn less than men, and that gap exists across all industries, age groups, geographic areas, and most occupations. In 2010, an Alaska woman earned 67 cents to a man’s dollar — a 5 cent increase from 1990.

"Nearly half of Alaska workers are female, but women here make less than 40 percent of total state earnings. This disparity translates into lower average annual earnings for women and a gap of $14,361 from men’s earnings in 2010. The average Alaska woman earned $29,323 — 67 percent of the average man’s $43,684.

"The discrepancy isn’t easy to explain. Within the same occupation, earning differences by gender may be a result of training and experience disparities, the number of hours worked in a year, or discrimination. This report doesn’t examine these variables, which are not measured by any currently available data source."

Alaska unemployment flat, below national rate for third year

From the October 2011 Department of Labor press release: "Alaska’s seasonally adjusted unemployment rate for October was essentially unchanged, declining one-tenth of a percentage point to 7.4 percent. September’s rate was revised down slightly, to 7.5 percent.

"The comparable national rate for October was 9.0 percent, also showing little change from September. The U.S. and Alaska rates have both fallen moderately in the last year. The national rate is seven-tenths of a percentage point lower than in October 2010, and Alaska’s rate is down half a percentage point.

"Alaska’s rate has been below the nation’s for exactly three years now, an unusual relationship after decades of the state’s rate being one to two percentage points higher than the nation’s. Not-seasonally adjusted unemployment rates increased in all but one of the state’s regions in October. This is typical as the job market continues its annual transition from summer to winter... Employment in construction and leisure and hospitality took a sharp seasonal downturn in October. Construction employment fell by more than 1,000, and leisure and hospitality lost more than 6,000 jobs. Over the year, total payroll employment was up by an estimated 2,300, with the largest share of new jobs coming from health care."

Anchorage ranked #2 for military retirees second careers

The United States Army Association and Military.com commissioned Sperling's BestPlaces to look at 379 major U.S. metropolitan areas to determine the best places for military retirees to launch second careers. Anchorage was chosen as the second-best medium-sized metropolitan area, based on the price of housing, unemployment rate, taxes and opportunities for work related to skills relevant to the military.

How will Alaska deal with the end of oil?

A cheery new paper from the ever-optimistic Scott Goldsmith at the University of Alaska Institute of Social and Economic Research looks at the end of peak oil in Alaska. Warning: explicit charts and graphs depict harrowing statistics! Not safe for work, especially if you work in the oil industry...

"Two-thirds of the economic growth since statehood, as measured by jobs and income, can be traced to petroleum production, petroleum revenues, and petroleum spinoffs that have given a boost to other industries and households throughout the state.1 Although these effects are most obvious in urban Alaska, they reach into every corner of the state—through generous public spending, low taxes, and the Permanent Fund dividend.

"This prosperity has come from giant, low-cost fields—the largest being Prudhoe Bay—that the state owns on the North Slope. But now, those fields are in serious decline. As Figure 2 shows, we’ve used 80% of this high-revenue oil, with only about 20% of the identified 23 billion barrels of reserves remaining. Still, despite this situation, two things are currently creating a sense of complacency among Alaskans. There’s a lot of petroleum employment right now, because more people are needed to squeeze the last reserves out of these fields. Also, high oil prices are bringing the state big revenues, even as production drops. Together, high employment and high prices have diverted our attention from the reality: when there is no oil left in the barrel, the associated jobs and revenues will also be gone.

"And although it’s impossible to predict how future events will unfold, Alaska’s experience in the late 1980s—when a crash in oil prices ended the first huge oil-revenue boom—provides a glimpse of what could happen. Virtually all Alaskans were affected—by losing jobs, seeing the value of their houses plummet, or watching friends leave the state."