The Cloudy COVID-19 Economy: After almost a year of the pandemic, the state's economic future remains murky.

• Author: Simonelli, Isaac Stone
• Position: HEALTHCARE SPECIAL SECTION

Though its largest city lagged behind, Alaska as a whole saw modest job growth in 2019, marking an emergence from a recession that started in 2014. Economists were cautiously optimistic in their predictions for what 2020 would hold for the state's economy. What none of them saw coming --what nobody saw coming--was the COVID-19 pandemic and the crippling economic damage it would cause.

"The entire world lost GDP, so here in Alaska it's estimated that we lost about 7 percent of our GDP from 2019, or about $4 billion," Governor Mike Dunleavy says.

The pandemic also resulted in significant job loss. There were 37,600 fewer jobs in September 2020 than September 2019, says Mouhcine Guettabi, an associate professor of economics at the Institute of Social and Economic Research (ISER).

On average, before the pandemic, there were about 930 unemployment insurance claims a week in Alaska. Since March 21, unemployment insurance claims jumped to an average of 8,000 a week. As of the week ending August 22, there were 29,146 continuing regular claims and another 11,375 Pandemic Unemployment Assistance claims, Guettabi explains.

Bill Popp, president and CEO of the Anchorage Economic Development Corporation, expects about 11,000 of those jobs to be lost in Anchorage.

Unlike the rest of the state, which saw marginal job growth, Anchorage ended 2019 down 400 jobs, Popp says. In the five years since the recession began, Anchorage lost about 6,000 jobs, add to that the estimated 11,000 lost due to the pandemic and, "That means 17,000 jobs lost in the last six years. And that puts us back to 2001 employment levels," Popp says. "We've basically lost about twenty years' worth of job growth in the city of Anchorage."

That accounts for about 40 percent of state's job losses, Popp notes.

Hardest Hit Industries

Though nearly every industry has taken a hit during the pandemic, some have suffered more than others.

"The big losers are the hospitality sector. And then, not far behind, there is retail trade," Popp says.

Healthcare, which had previously been a bright spot of economic growth in the state, was also hit by the pandemic. Despite what some might expect, healthcare employment did not go up, Popp says. In fact, there was about a 1,000 job decline in the industry in Anchorage this year.

"Elective procedures have just dropped dramatically in Anchorage. People don't want to go to a hospital unless they absolutely have to," Popp says. "And then, on top of that, the hospitals have to preserve resources to protect themselves to be able to take care of surges that come and go in a COVID pandemic."

Dunleavy notes that, as the country better understood COVID-19, there was an increase in elective surgeries toward the end of the year.

"We're somewhat in the same situation that the other states are and other countries are in terms of their economies and their healthcare," Dunleavy says. "The focus is on the virus and making sure that we have the capacity but, at the same time, also addressing the everyday events that occur in the everyday lives of folks... that find people ending up in the hospital."

The oil and gas industry, which remains a pillar of the state's economy, was also not immune to the effects of the pandemic.

Popp points out that the industry took heavy blows and faces a global outlook that leaves little room for optimism. In April, oil prices dropped into the negatives for the first time in history. By May, prices had...