The national economy's effect on Alaska.

• Author: Barbour, Tracy
• Position: ECONOMY

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Despite the nation's economic woes, the Alaska economy continues to experience steady growth. And although certain industries have seen declines, Alaska businesses seem to be maintaining a positive stance.

The nation is struggling with a recession, but the Alaska economy has experienced 20 years of uninterrupted, moderate growth, according to Neal Fried, an economist with the Alaska Department of Labor. The State's economy is growing at around 1 percent, meaning there's about 1 percent more jobs in 2008 than in 2007. "It's a heck of a lot better than the negative that we're seeing in the nation as whole," Fried said.

Employment is on a downward trend nationally, while the rest of the country has seen about seven months of employment losses. The scenario in Alaska is very different. Many companies are doing well, and there have been no announcements of major layoffs. If Alaska had a "confidence index," Fried said, it would be a lot higher than the national average.

The economic climate in Alaska is interesting when compared to that of the Lower 48. The difference lies more in that the nation has changed - not that we have changed so much, according to Fried. "We still have growth in our economy," he said. "We aren't mired nearly as much by the housing crises, like so much of the rest of the country. So our economy is a lot better."

A STARK CONTRAST

The United States is straining under an increasingly weakening economy pounded by high unemployment, rampant inflation, and a housing crisis, among other factors. The country's unemployment rate jumped to 6.1 percent in August--the highest in nearly five years--as employers cut payrolls for an eighth straight month and a decline in labor markets accelerated.

Foreclosures sped up in the second quarter to the fastest pace in almost three decades, as interest rates increased and home values tumbled, according to the Mortgage Bankers Association (MBA). Adjustable rate mortgages or ARMS are a major factor in the national housing crisis. Subprime ARMs comprised 36 percent of new foreclosures, and prime ARMs--held by the most creditworthy borrowers--were 23 percent, reports the MBA. The three-year-old housing slump has contributed more than half a trillion dollars of losses at banks such as Citigroup Inc. and UBS AG. It has also impacted earnings for companies like Home Depot Inc. and Lowe's that rely on sales from home purchases and improvement projects.

Alaskans may be affected...