The Alaska Economy Projections for 2019
Since 2015, Alaska has experienced a state-wide recession brought on, primarily, because of job losses in the construction and petroleum industries. In addition to unemployment, the state has also experienced some significant spending cuts. These events, along with others, have combined to create the “perfect storm” that brought about the recession. No one likes living through a recession; they create a lot of anxiety because of market uncertainty. As bad as they are, however, they always come to an end as economies correct themselves. As a Seattle-based business that supports industry in Alaska, we have a vested interest in everything that happens in the state of Alaska; especially when it pertains to the economy. It’s been difficult to watch this state-wide recession, but as we approach 2019, we are hopeful that things will begin to turn around.
PREDICTIONS FOR 2019
When it comes to predicting when Alaska’s recession will end, there are two schools of thought. One predicts the recession will begin to turn around in 2019 while the other predicts it will continue for a while. Here’s a breakdown of both opinions:
- Recession continues: According to a leading Economics firm, it is predicted that Alaska’s recession will last another three years and once it ends, Alaska will have a smaller and poorer economy. According to this prediction, Alaska will continue to lose jobs well into 2020 with no real recovery expected within the next decade. It is estimated, based on this prediction, that residents will leave in search of better opportunities with a net loss of more than 30,000 residents over the next decade. In addition to these predictions, this firm also looks at the GSP (gross state product) of Alaska which has declined for the past five years and is down 22% due to lower oil prices and production. Those of this mindset see little opportunity ahead which will impact the number of people moving to the state which simply adds to the already downward cycle.
- Recession turns around beginning in 2019: The second school of thought, which is a bit more hopeful, sees Alaska’s economy turning around beginning in the early part of next year; especially the city of Anchorage. It is expected that the unemployment that has hit Anchorage will level off beginning in 2019 and even begin to see some gains. In addition, Alaska residents can expect a Permanent Fund Dividend of $1600 this year, pumping a significant amount of cash into the economy. The Permanent Fund Dividend is paid to all Alaska residents from investment earnings of mineral royalties. In addition to this, new jobs are expected to develop in 2021.
As you can see, there are two very different opinions about Alaska’s economic future. We certainly hope the latter opinion is correct. We love Alaska and love to see our adopted-home-state thrive and prosper.