Mid-year economic outlook: 'The Great Alaska Comeback'.

• Author: Slaten, Russ
• Position: SPECIAL SECTION: Mid-Year Economic Outlook

ALASKA

Alaska's economy is strong and getting stronger. With the More Alaska Production Act, we are seeing billions of new dollars in new investments, more rigs on the North Slope, over one thousand new jobs at Point Thomson, increased traffic on the Dalton Highway, and more pipe being shipped north on the Alaska Railroad. The Great Alaska Comeback is underway With that firm foundation, we are making real progress on a gas pipeline and diversifying Alaska's economic base.

--Governor Sean Parnell

BANKING & FINANCIAL SERVICES

Alaska's economic outlook will depend on the voters in our state learning the facts about Alaska's economy. The more each Alaskan understands what drives our economy, the better prepared they will be to positively support our state's economy in the years to come, building a lifestyle they can enjoy and providing jobs for future generations. On August 19 it will be informed Alaskans who make a difference when they exercise their right to vote on ballot measure one. Learn the facts, join the conversation, and vote.

--Betsy Lavver, President, First National Bank Alaska

The economy in the State of Alaska is stable and stands to benefit from a number of public and private construction and infrastructure projects under consideration and underway in 2014--likewise with the banking business.

Though banking, in general, reflects the strength of our state's economy, headwinds are being imposed by costly new regulatory requirements. What's more, banks can expect increased competition from non-bank financial institutions that are not similarly regulated. Record low long-term interest rates rose slightly in 2013 and are expected to remain steady until year-end. Expected short and long-term interest rate hikes in 2015 may increase deposits and offset the possible slowdown of loan demand.

Meanwhile, employment in the financial sector grew modestly in 2013 and is expected to slightly increase or remain flat through 2014.

--Brian Nerland, Alaska Market President, KeyBank

I expect the second half of 2014 to remain stable and positive for the Alaska economy. Home prices are rising slightly on account of a stable job market and steady per capita income gains. We have seen a multi-billion dollar investment by the oil industry after the state tax structure was modified last year. Not changing this system through voter initiative later this year will be an important signal to energy companies that Alaska is a safe place to invest their long-term capital. Oil investment, coupled with large state and federal government capital budgets, has led to strong construction spending levels that are outpacing 2013. The tourism sector has posted its fourth consecutive year of increased visitors. Alaska is approaching 2 million visitors a year, who are reported to spend nearly $4 billion annually in the state.

--Mark Edwards, Bank Economist Northrim Bank

Alaska's banks continue to maintain a strong capital position as we work with Alaska businesses to fuel Alaska's economy, making every good loan we can to businesses and consumers. The Alaska Bankers Association is optimistic about Alaska's future with the potential for increased oil and gas exploration and production activity. The ABA supports SB21 as a means to grow Alaska's economy over the long term.

--Joe Everhart, Alaska Regional President Wells Fargo

ALASKA NATIVE CORPORATIONS

While there have been many challenges to overcome in recent years, Bristol Bay Native Corporation continues to have record earnings due to our diversified portfolio of operations and assets. Our recent acquisition of Peak Oilfield Service Company has broadened our already successful oilfield service segment. With an increase of independent oilfield company exploration and a renewed focus from major oil companies, BBNC believes the sector is poised for growth. Tourism is coming off a very strong year with more to come. BBNC has fared well in real estate development in the Anchorage market where timing and the right partners makes all the difference.

We believe Alaska is a great place to invest if you are assertive and disciplined. We have a competitive marketplace with more investors looking to our State for growth opportunities every quarter.

--Jason Metrokin, President & CEO Bristol Bay Native Corporation

Calista Corporation continues to build a strong foundation for our region and shareholders and descendants through our business activities, corporate involvement, and !! succession planning. As anticipated, federal sequestration placed pressure on ANCs in 2013, but we are looking forward to strong revenue forecasts for 2014. The SBA 8(a) program plays an important role in our success, but with continued attacks on the program, we are succeeding on our work to diversify our revenue base. Calista's internship and scholarship programs are growing and provide students with the knowledge and financial means to further their education and gain employment. In the region, we look toward energy solutions and infrastructure improvements. This year, we will see several rural airport improvement projects and the first steps toward a Yukon-Kuskokwim Corridor.

--Andrew Guy, President & CEO Calista Corporation

We are cautiously optimistic about current growth trends. We see the broader US economy improving, which has driven a very active investment climate. Since adopting a new organizational structure at the beginning of this year, Chugach is well-positioned to support sustainable growth strategies and deliver strong returns to shareholders. Alaska's stable economy and steady growth present an opportunity to expand our portfolio of companies and invest in local businesses and industries. We believe many businesses across the state share our commitment to providing quality products and services with integrity and could benefit from a long-term partnership with Chugach. We would like to see the state's current business environment remain healthy to support local businesses and jobs and a strong Alaska economy.

--Gabriel Kompkoff, CEO Chugach Alaska Corporation

CIRI believes the outlook for the Anchorage economy is strong and our confidence is reflected in the investments the company is making. CIRI anticipates the oil and gas industry in Alaska to remain an economic driver, and in late 2013, CIRI and two other partners acquired the ConocoPhillips Office Complex, including Alaska's tallest office building, CIRI has also embarked on the development of a new eight-story office tower in Midtown Anchorage. The building will be part of the Fireweed Business Center located at the intersection of Fireweed Lane and the New Seward Highway. Demand for commercial real estate, particularly Class A office space, is strong, and CIRI expects this trend to continue into the foreseeable future.

--Sophie Minich, President & CEO Cook Inlet Region, Inc.

ARCHITECTURE & ENGINEERING

It appears that engineering firms that design public transportation infrastructure will have another busy summer, as several projects go into construction this summer and the Alaska DOT&PF capitalizes on Highway Safety Improvement Funding to get new design projects started. There is some uncertainty in federal funding of future transportation projects due to the projected insolvency of the Fiighway Trust...