Running in place: Alaska's economy holds its own - barely.

• Author: Richardson,Jeffrey

While the Alaska economy could have been worse, it certainly could have been better, and most business people will be glad to see a new year -- and new opportunities -- in 1993.

If the state's economy did better than some expected, that was because nobody expected very much. Holly Stinson, labor economist for the Alaska Department of Labor, says employment growth was forecast at a miniscule .8 percent, but she expects 1992's final growth figure to be 1.5 percent.

"Where we're hurting is the goods producing sector," she notes. "It's the producers, but even more it's oilfield services, which was down over 1,300 jobs or 20 percent as of September." Stinson says job growth was recorded in seafood processing (3 percent), while trade and services and retail have been largely flat. Also showing growth was government (3 percent), especially local government as the state's growing population created jobs for teachers.

Other observers agreed that the state's 1992 performance was uninspiring. "The best word to describe Alaska in 1992 would be flat," says Scott Hawkins, president of Anchorage Economic Development Center. "The only notable exception is Fairbanks, which turned in a better than decent performance on retail." Hawkins says job growth in Anchorage slowed to "a crawl," and predicts less than .5 percent growth for the city.

Statewide, Hawkins agrees that the oilpatch, which laid off a thousand high-paying jobs, is the biggest drag on the economy. "I think what we're seeing as the oil industry downsizes is a preview. Depending on oil prices, what we see there is what we'll see generally in two or three years.

"The 1990s have arrived for Alaska," Hawkins says. "The idea that the oil industry is on the way out is no longer just a pastime for pessimists. Now it's all the more urgent to focus on other industries. ANWR is out of our control. We need to bring the seafood industry on shore, encourage more air cargo and build new resorts," he urges.

Hawkins points out that although the state's economy may have been sluggish this year, by comparison with the rest of the country, Alaska isn't doing so bad. "We probably did a touch better than the rest of the country. We will close the year with positive employment growth of 1 percent or so, and that's not true for the country as a whole," he says. Hawkins also notes that Alaska, unlike the Northeast and California, has not lost jobs due to military cutbacks, but actually gained as some 1,000 new troops arrived at Elemendorf Air Force Base.

The following industry reviews are based on assessments by government and industry analysts on how critical economic sectors fared.

Oil & Gas

While the decline of Prudhoe Bay continues, observers could point to Arco's Kuvlum discovery in the Beaufort Sea as proof that the Alaska oil industry is by no means dead. Jim Weeks, Arco senior vice president for Prudhoe Bay, says, "Everybody's excited about Kuvlum, but it's too early to start counting dollars. We really have no way of knowing about it until we drill more wells, but it's very positive news.

"The state of Alaska says it gets no royalties from Kuvlum, but there will be a pipeline to Point Thompson, which will allow it to be developed and keep wellhead prices lower and keep...