1994 - and beyond: Alaska's business leaders look to the future.

• Author: Gerhart, Clifford

Predicting the future is a particularly gratuitous form of error. But in business, you must predict in order to plan; and to look to the future, you must analyze the past.

To get a grip on Alaska's economic future, Alaska Business Monthly went to the state's business leaders and asked: How did 1993 shape up for you? What business plans are you making? What do you see as high points and low points for Alaska's economy? The challenges and trends? How do you feel about the state's economic future? What paths do you see ahead for your industry and the state?

Most of these leaders express confidence in Alaska's economic future. While some plan new job hires and capital expansion, others foresee cutbacks. Practically all of the business people interviewed see prosperity for their companies, their industries and the state.

None of the leaders seem to think Alaska would face another boom -- or another bust. Most feel that the state could look forward to slow but steady growth in a maturing Alaskan economy.

Alaska's business leaders are looking to the future with cautious optimism. So while no one knows the future, here are the best guesses by some people who have given Alaska's economic future a lot of thought.

MANUFACTURING: Ernie Hall President, Alaska Furniture Manufacturing/Limited Editions and Kiana of Alaska.

Hall says his companies had a fair but not a fantastic year in 1993.

"Kiana is up overall in sales, and that's because our product went into Kmart," Hall says. "We're down in other areas because there are so many gift shops, especially in downtown Anchorage. Since all the hotels are filled to capacity during the summer, there's a 'tourist cap,' and I don't see much growth potential."

Hall predicts 1994 will probably be a good year for his furniture as a lot of construction projects are completed and need furnishing. Overall, he sees slow, stable growth.

"I'm apprehensive about 1995. The commercial building boom will be over. The bright spot is military spending, and I see that the military is planning to spend more here. We've been worried about military closings."

For the future, "I think we're going to see a transition. Alaska's economy will be much more service-intensive. When construction winds down, workers will be looking at $8 to $10-an-hour jobs instead of $20-an-hour jobs."

RETAIL: Bob Matthews General manager, Kmart in Anchorage.

Kmart opened its first store in Anchorage in September. A newcomer to Alaska, Matthews says things are going well for the retail giant despite some initial problems. "Our opening exceeded expectations and business here has remained strong. We're struggling with our supply lines, and we're working that out. Our computer systems work well in the Lower 48 with their short lead times, but distribution here is a problem."

Matthews predicts a strong discount retail environment in Anchorage and a good Christmas. He points out that the market will be divided with other retailers.

Matthews looks forward to doing business in the Last Frontier. "We feel that Alaska is a place we should be. Once the pie is sliced up, it won't be such a glowing picture, but that's the nature of competition."

TOURISM: Karen Cowart Executive director, Alaska Visitors Association.

Cowart calls 1993 a strong tourism year, with a dramatic rise in cruise ship tourism and a good...