2009 industry forecast for Alaska's key industries: Alaska industries weather well the national economic storm.

• Author: Lavrakas, Dimitra
• Position: ECONOMICS - Industry overview

Within the next pages, you will encounter the opinions of your fellow Alaskans on how they see their industry's health for the coming year. This annual special section is a great way for industry leaders to communicate with Alaska Business Monthly readers on the full spectrum of the health of Alaska's businesses.

We all know this is a very volatile, as well as alarming, time in America's economy. Please take note that the lack of a commercial real estate forecast in this issue is indicative of this uncertainty. Luckily for Alaska, our economy seems to be thriving now. The state's financial outlook, buoyed by the promise of a natural gas pipeline and somewhat insulated with oil revenues from 2007, is chugging along at a pace envied by those in the Lower 48. (However, there are worries that it will eventually catch up with us.)

Our wish for the New Year is, naturally, that it remains so.

Read on for the predictions for 18 of the state's leading industries.

COMMUNICATIONS

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By Liane Pelletier

President/CEO/Chairman

ACS

Telecom is an essential service for individuals and organizations. It's key to staying connected in the 21st century. It provides access to anyone around the world and doesn't require gasoline. Because of its central role in everyday life, telecom is typically recession-proof. But how people communicate is rapidly shifting.

Individuals are moving beyond landlines and fixed Internet connections, "cutting the cord" and opting for mobile services. Increasingly, telecom products or services are valued by their degree of mobility. People don't stay put in their homes and offices, and they expect their voice and data connections to move with them. They want to keep connected to the Internet or their corporate network at all times, whether in the car, at the office, on an oil rig, or aboard a fishing boat. And some calls are too important to miss, like those from your boss, your customers, your real estate agent, or your babysitter.

As technology advances and the world's economy becomes increasingly global, businesses and organizations have changed how they operate. With suppliers, employers, customers and partners located around the world, work needs to get done 24/7 across multiple time zones. Telecommunications enables these real-time connections.

Every few years, organizations double their bandwidth needs and they count on service providers like ACS to bring them the most modern and cost-effective technologies. They need reliable connections that avoid every foreseeable source of failure.

Providers like ACS have stayed ahead of the curve by building fast, high-quality mobile and fixed-voice and data networks that connect seamlessly throughout the United States, Canada and beyond. These technologies are standards-based and do not require specialized training, specialized equipment, or long implementation cycles. When customers' needs change and evolve, these technologies allow their network to grow or expand quickly and easily.

Clients need to focus on their business--they look to providers like ACS who can help their organization do more with the same amount of money. Customers need to know the telecom infrastructure that powers their businesses will survive natural or human-caused disasters. So they rely on providers like ACS with resilient networks based on diverse routes and multiple back-up systems.

ENVIRONMENTAL

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By Jeanne Carlson

Program Director

Green Star

As we move into 2009, we are at a low point in our economy and at a peak in the "green" business movement. This is evident as retail leaders and product manufacturers across the country shift marketing dollars to appeal to demands from customers and clients who are concerned about the environment.

Going green is no longer just for environmentalists--it's a practical business choice. It goes beyond reducing pollution and toxics to reducing overall waste--wasted money, wasted energy and wasted resources. The old adage that saving money on the front end is as good as earning profits is alive and well today as businesses look for ways to cut costs and increase efficiency.

Green Star has been helping businesses reach their environmental goals for almost 20 years, beginning long before the current wave of green businesses hit the scene. The Green Star Award certification program was created in 1990 to offer the Anchorage business community a means of certification and recognition for voluntarily reducing environmental impact and increasing efficiency.

As a pioneer in the realm of green business certification, Green Star continues to be at the forefront of the green business movement. Today, together with nearly 300 member businesses, nonprofit organizations, government agencies and schools, Green Star is actively striving toward a vision of an environmentally sustainable and economically viable Anchorage business community.

Green Star offers to its members a professional energy/waste assessment that thoroughly examines the business' current policies and technologies, recognizes its existing green infrastructure and behavior, and recommends options for further decreasing the environmental impact of daily operations. Member businesses have found that by streamlining activities and upgrading technologies, savings can be substantial.

By changing to more efficient lamps, Driven Auto Body, a Green Star-certified business, recently saved $20,000 in annual energy costs with just a $10,000 capital investment. That's a payback period of just six months. Savings such as these are continual reminders of the efficiencies that can be achieved as energy costs continue to rise.

This New Year's, make a resolution to become more energy efficient, and at the same time, more profitable.

FINANCE

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By Marc Langland

Chairman, President & CEO

Northrim Bank

Economists have confirmed what many have long suspected--the U.S. economy has been in a recession since the beginning of 2008, with the financial industry reaching a crisis point in mid-September. Some very large investment and commercial banks failed, and Congress approved a multi-billion dollar bailout of the industry.

What does this mean for Alaska and its financial sector?

At the end of September, Moody's issued a report that showed 30 states in recession, 19 at risk for recession, and only one--Alaska--still expanding. While we won't be able to escape the effects of the U.S. recession entirely, Alaska's economy is truly different than most of the Lower 48.

Our economy is stable and still growing--although at a slower pace than the past few years.

Alaska's housing prices didn't appreciate as rapidly as other markets, so while homes are selling more slowly, prices are stable. New housing starts are down dramatically, which keeps inventory low and helps stabilize prices. Alaska's home foreclosure rate is among the lowest in the nation.

Surplus State revenues from last year's historic high oil prices allowed funding of a $2.6 billion capital budget, and billions more were saved.

Alaska's total State and State agency debt is just $7.6 billion, against State assets of $62 billion (excluding 103 million acres of State land).

Without a State income or sales tax, Alaskans generally have higher disposable incomes. The Permanent Fund Dividend and energy rebate injected $2 billion into the Alaska economy.

Despite recent stock market losses, the Alaska Permanent Fund, Alaska Housing Finance Corp. and other State government entities have billions in reserves to provide financial stability.

Declining federal earmarks may be offset by another large economic stimulus check in 2009 and aggressive monetary policy to strengthen the economy.

Northrim Bank, like other Alaska banks, did not make subprime loans or invest in exotic derivatives. Alaska's banks are well-capitalized and actively making loans to good borrowers--although debt costs and equity requirements may be higher due to increased risks in the market.

As a community bank, Northrim reflects the strength of our local economy. While there are certainly some reasons for caution--lower oil prices and production, for example, impact both the State budget and private investment -we are fortunate to be in Alaska right now and we remain cautiously optimistic about the future.

FISHING

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By Mark Vinsel

Executive Director

United Fishermen of Alaska

In 2008, record-high fuel prices were the biggest business problem for the Alaska fishing industry, but high market and dock prices for many of Alaska's fish species kept most dedicated fishermen in business. Many will fish in 2009 with reduced fuel consumption from lessons learned and boat improvements made during the off season. It is too early to tell what reductions in rural fuel prices might follow from lower oil prices, but most fishermen learned about optimizing their fuel use and can benefit from vessel improvements and subtle changes such as timing trips to take advantage of currents.

Good prices that most fisheries enjoyed in 2008 may be lower, with less restaurant demand, especially on high-ticket king salmon and halibut. Salmon runs are difficult to predict but tend to balance across state. Southeast pink salmon should rebound from 2008's low numbers, which was the second generation...