Alaska Progress Report

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."

The seafood industry in Alaska's economy 2011

From a new report prepared by Northern Economics for the Marine Conservation Alliance:

• Alaska led all states in terms of both volume and ex-vessel value of commercial fisheries landings in 2009, with a total of 1.84 million metric tons (MT) worth 1.3 billion dollars.
• National harvest volume in 2009 was 3,568,599 MT.
• In the list of top 50 U.S. ports based on volume for -2009, Alaska had 11 including Dutch Harbor-Unalaska (1st); Kodiak (4th); Naknek-King Salmon (11th); Sitka (14th); Ketchikan (15th); Petersburg (18th); Cordova (21st); Seward (26th); Homer (36); Juneau (41st); Kenai (50th).
• In the list of top 50 U.S. ports based on ex-vessel value for 2009, Alaska had 10; 8 of them were in the top 20. These ports include Dutch Harbor-Unalaska (2nd); Kodiak (3rd); Naknek-King Salmon (4th); Sitka (5th); Homer (12th); Seward (17th); Ketchikan (18th); Cordova (19th). Three other Alaska ports, Akutan, King Cove and Sand Point, would also make the top 20 were it not for confidentiality requirements that prevent release of data for ports with fewer than three processors.
• In 2009, Dutch Harbor-Unalaska was the leading U.S. port in quantity of commercial fishery landings, and the second U.S. port in value of commercial fishery landings.
• Dutch Harbor-Unalaska ranked second (after New Bedford, MA) with a harvest value of $159.7 million dollars; Kodiak was ranked third at $103.8 million, and Naknek-King Salmon ranked fourth at $76.1 million dollars.
• The seafood industry, through direct, indirect and induced effects, contributed a total of $4.6 billion to Alaska's economic output in 2009.

See the full report for bullet-nirvana.

Alaska has lowest Q4 2009 auto loan delinquency rate

More good news about the fiscal status of Alaskans from Transunion: Alaska had the lowest rate of delinquencies on auto loans in the fourth quarter of 2009: "The national 60-day auto delinquency rate (the ratio of auto loan borrowers 60 or more days past due) showed no change between the third and fourth quarters of 2009 (0.81 percent), according to a TransUnion quarterly analysis of trends in the auto industry. The year-over-year delinquency rate at the national level decreased by 5.81 percent in the fourth quarter.

"...Auto loan delinquency was highest in Mississippi and Alabama at 1.45 percent and 1.39 percent, respectively. The lowest auto loan delinquency rates were found in Alaska (0.29 percent), North Dakota (0.32 percent) and South Dakota (0.41 percent). The largest improvements in delinquency from the previous quarter were found in Alaska (35.6 percent decrease from 0.45 percent) and Idaho (28 percent decrease from 0.67 percent).

"Average auto debt nationally increased slightly between the third and fourth quarters of 2009 from $12,542 to $12,568. The year-over-year auto debt fell by 1.1 percent. The state with the largest auto debt burden was Nevada at $14,376, followed by Texas at $14,372. The lowest average auto debt was in Nebraska at $10,738. The states with the steepest annual increases in average auto debt as a percentage were Michigan (+3.47 percent), Tennessee (+1.6 percent) and Montana (+1.56 percent). New Mexico experienced the sharpest drop in average auto debt (-3.0 percent) followed by Nevada (-2.3 percent).

"...On a state-level basis, 18 states experienced a drop in their quarter-to-quarter delinquency rates while 35 showed a drop on a year-over-year basis."

Alaska has highest Q4 2009 credit card debt, lowest delinquency

And in the category of things that make you go hmm... in the fourth quarter of 2009, Alaskans had the highest average credit card debt of any state, even with the second highest decrease in that indicator. At the same time Alaska also had the lowest delinquency rate, just over half the national average. The obvious reason for this strange set of affairs is that our economy is doing relatively well compared to the rest of the nation by almost every indicator. From Transunion:

"...the national credit card delinquency rate (the ratio of bankcard borrowers 90 days or more delinquent on one or more of their credit cards) increased to 1.21 percent in the fourth quarter of 2009, up 10 percent over the previous quarter. Year over year, credit card delinquencies remained flat.

"...As expected, incidence of credit card delinquency was highest in Nevada (2.00 percent), followed closely by Florida (1.75 percent) and Arizona (1.62 percent). The lowest credit card delinquency incidence rates were found in Alaska (0.67 percent), North Dakota (0.69 percent) and South Dakota (0.74 percent). Mississippi saw the largest quarter-over-quarter increase of 21.1 percent in credit card delinquency. However, there were some bright spots in the fourth quarter as seven states saw a drop in their credit card delinquency incidence rates.

"Average credit card borrower debt (defined as the aggregate balance on all bank-issued credit cards for an individual bankcard borrower) drifted downward nationally by 3.18 percent to $5,434 from the previous quarter's $5,612, and down 5.15 percent compared to the fourth quarter of 2008 ($5,729). The highest state average credit card debt remains in Alaska at $7,328, followed by Tennessee at $6,823 and Alabama at $6,332. The lowest average credit card debt was found in Iowa ($4,139), followed by North Dakota ($4,318) and West Virginia ($4,448).

"Unlike last quarter, no state showed an increase in average credit card debt from the prior quarter. The steepest decreases in average credit card debt over the previous quarter occurred in Nevada (-6.23 percent), Alaska (-4.8 percent) and Rhode Island (-4.4 percent)."

Alaska tied for lowest increase in bankruptcies

It doesn't tell us where we stand in absolute terms, i.e. number of bankruptcies per capita, but a new AP report says we're doing allright: "The AP gathered data from the nation's 90 bankruptcy districts and found 1.43 million filings, an increase of 32 percent from 2008. For Alaska, where the economy was in a mild recession compared with a sharp recession in many other states, the increase in filings was 12 percent. Nebraska's increase was the same...

"Bankruptcies surged to slightly more than 2 million in 2005 as consumers rushed to file before the new law took effect but then plummeted to 600,000 in 2006. They've been climbing ever since and in 2009 became the seventh-highest year on record, behind only the years 1998 and 2001-2005." They add that there's no sign of a slowdown in filings.

Alaska only state where Q3 income outpaces inflation

I know you all spend a lot of time on the Bureau of Economic Analysis site, cruising the data and running crosstabs. Don't deny it. Check out the personal income data. It turns out that in the third quarter 2009 personal income, the broadest measure of income because it includes all sources, grew 0.3% nationwide, down from 0.8% in Q2. It wasn't distributed equally of course: there were a total of 19 states where personal income grew, but only in Alaska did it grow faster than inflation.

Alaska has always been near the top in per capita personal income; you can chart it yourself on the BEA site. Althought Q3 was anemic growth for us at 0.8% it was still growth, it was still the highest growth among states and better than the worst state, Louisiana, at -0.4%. We're all in this together.

Alaska 8th in 2008 personal income

The US Bureau of Economic Analysis recently released its 2008 personal income data. Alaska had the largest quarterly decline from the fourth quarter 2008 to the first quarter of 2009 of any state at 3.2%, mostly because of the big state dividend plus energy rebate last year.

Looking at annual numbers, Alaska ranked eighth in per capita personal income in 2008. Washington, D.C. was ranked first. Personal income is the most comprehensive measure of income including virtually all sources.

Kodiak, Juneau have most expensive groceries in nation

Each quarter C2ER, the Council for Community and Economic Research, collects more than 90,000 prices from 309 "urban" communities across the US for the Cost of Living Index. For the first quarter of 2009 C2ER featured the communities with the most and least expensive groceries as measured by the grocery index number. C2ER collects data on 26 separate items to represent the grocery component of the index.

Kodiak, Alaska was number one on the list with an index of 153.4 compared to an average of 100 for the 309 communities surveyed. #2 was Honolulu, HI (152.8), followed by Manhattan, NY (145.1), Truckee, CA (135.2) and Juneau, AK (132.7).

Anchorage On Most Expensive Cheese List

Another entry in our category of Reports of Dubious Utility, this time from the Council for Community and Economic Research. Keepers of the oft-quoted cost of living index, C2ER tracks prices of six components – housing, utilities, grocery items, transportation, health care and miscellaneous goods and services. Alaska communities frequently show up on their "top five" most expensive lists.

This time they seek to answer the critical question, "Which grocery items prices had the highest average percentage change from quarter one 2008 through quarter three 2008? C2ER collects more than 50,000 prices from communities across the US for the COLI. Over the first three quarters of 2008, parmesan cheese and potatoes had the largest price differential. Parmesan cheese registered a 22 percent difference from the first quarter to the third quarter and potatoes a 31 percent change. Below is a listing of the most, and least, expensive places to buy those items."

Drum roll, please. The five most expensive places to buy Parmesan cheese are: Missoula, MT, $6.27; Honolulu, HI, $6.25; Oakland, CA, $6.06; Anchorage, AK $5.97; Bellingham, WA, $5.90. The average price for 322 urban areas during the first three quarters of 2008 was $3.71. Now we can officially have whine with our cheese.

Alaska Economic Trends, December 2008

The December 2008 edition of the invaluable Alaska Economic Trends is out. The cover story is retail trade in Alaska: "Since 2000, retail employment has grown more than 8 percent... With sales of more than $7 billion statewide, retail is the state’s largest private-sector employer with 15 percent of Alaska’s work force, followed by hospitality at 14 percent, then professional and business services, and health care at 11 percent each."

Also looking good is personal income: "Altogether, Alaska residents – women, men and children – earned $27.6 billion in 2007, which is up $1.7 billion, or 6.7 percent, from 2006 and is the most robust growth in nearly two decades. Alaskans’ per capita income was $40,352 in 2007, putting Alaska in 15th place in a ranking of all 50 states..." Alaskans do even better when taxes are figured in, moving up to 7th place in the nation for disposable income.

Not so great are the unemployment numbers: "Alaska’s seasonally adjusted unemployment rate rose seven-tenths of a percentage point in October to 7.4 percent. September’s rate was revised down one-tenth of a percentage point to 6.7 percent." The national rate is 6.4 percent. That's a big jump for the Alaska rate, but what's odd is that we're still adding jobs, and unemployment claims are not up much. Before jumping to conclusions wait a couple months to see if the figures are revised based on better data.