Anchorage economic overview.

• Author: McCracken, Jon
• Position: Anchorage, AK

With a good portion of the year behind us, it is looking like 1999 will continue to be a good year for the Anchorage economy. Although construction is slightly slower than anticipated and oil employment is down due to layoffs, most other sectors are growing comfortably. The Anchorage Economic Development Corp. anticipates continued growth for the Anchorage economy. Look for approximately 2,500 additional jobs or 2 percent growth by year's end.

It's summer in Anchorage and residents are taking to their yards in droves and remodeling their homes. I recently paid a visit to the neighborhood Eagle Hardware to price some garden supplies - big mistake. The parking lot was awash with cars and the store was full of customers. As I was fighting my way to the garden supplies, it occurred to me that Anchorage residents are taking the oil downturn and the state fiscal crisis in stride. To prove my point, just look at the data.

With about half of 1999 completed, Anchorage's economy is still showing signs of growth, albeit at a slower rate than 1998. Comparing the first quarter of 1999 to 1998, Anchorage has added approximately 3,600 jobs, which is equivalent to 2.9 percent annual growth. As expected, the oil and gas sector is shedding jobs, while air transportation, services, and construction are growing comfortably.

Caution is in order, however. Despite all this good cheer, the Anchorage economy is showing signs of slowing. As we peer into the future to determine the fate of the remaining months of 1999, questions loom. What impact will the BP Amoco Corp. purchase of Atlantic Richfield Co. have on the economy? How will state legislators solve the Alaska budget shortfall?

These and other questions will be sorted out in the next year or two. So what does Anchorage Economic Development Corp. predict for impacts on the economy? If the past five months are any indication, we will continue to grow.

Oil & Gas

In the oil and gas sector, record low prices over the past year stimulated ARCO Alaska and BP to layoff several hundred Anchorage employees. Compared to the same time last year, the first quarter of 1999 saw 5.3 percent decline in employment or a loss of approximately 130 jobs. Since 1992, employment in the oil and gas sector has been slowly declining. Only during 1994 and 1998 was there a reprieve from the slow decline. So what can Anchorage residents expect during the remainder of the year and into 2000? In short, more of the same. Having a profound...