AEDC: Pandemic could wipe out 20 years of growth
Anchorage could be facing a lost generation of economic growth when the ongoing impact of the pandemic is added to the lingering effects of the recession from which Alaska had just emerged.
Anchorage Economic Development Corp. CEO Bill Popp said the city is likely to lose more than 11,100 jobs this year during a virtual presentation of the organization’s annual three-year economic outlook for Anchorage on Aug. 5. Those losses would take the city back to employment levels last seen prior to 2000, when employers offered about 140,00 jobs in Anchorage, according to AEDC and state Labor Department figures.
Anchorage was already at the tail end of a four-year recession — in which more than 6,000 jobs were lost — that Alaska overall had began to pull out of.
Popp said in January that AEDC leaders expected Anchorage to add about 100 jobs this year and officially put an end to the recession.
However, the severity of the pandemic-induced recession that suddenly took hold in March could result in the “destruction of aspects of our economy” Popp said in an interview. He urged lawmakers at every level to work on finding ways to help keep businesses afloat and prevent large-scale foreclosures or evictions.
“Time is the enemy,” Popp said.
Unsurprisingly, AEDC officials expect the leisure and hospitality industry to be hit the hardest with the loss of more than 5,000 jobs, or 30 percent of the sector in the city. No other industry is expected to lose nearly as many jobs; retail is expected to contract by about 1,000 jobs, or 7 percent, the next largest loss overall, according to AEDC’s forecast.
Passenger traffic through Ted Stevens Anchorage International Airport — a key component of the leisure and tourism sector — is expected to drop by 60 percent this year to about 2.3 million passengers with steady growth in the following years to 5 million passengers by 2023. Air cargo volumes at the airport, which is one of the busiest cargo hubs on Earth, is expected to grow slightly this year and remain in the 3 million tons per year range going forward, according to the AEDC forecast.
The oil and gas industry, hit hard by very low market prices that briefly went negative in April, is not expected to show major employment losses again in Anchorage offices that were previously scaled back during the 2015-17 price downturn. AEDC is predicting the industry will lose about 300 jobs this year from approximately 2,500 before adding those positions back in 2021.
In June, Anchorage had an average unemployment rate of 12 percent, down slightly from May but still far beyond the 5 to 6 percent range where it had been for many months prior. Statewide, unemployment averaged 12.4 percent in June, despite the fact that the start of commercial salmon fishing statewide helped add approximately 18,000 jobs during the month.
Still, Alaska was down 37,700 jobs from a year ago, with more than 18,000 of those losses coming from Anchorage and the Matanuska-Susitna Borough, according to Labor Department data.
Popp said AEDC expects the Anchorage economy to begin recovering by next year — but the re-growth is not likely to be sudden — with approximately 3,300 new jobs in 2021. By 2023, Anchorage will likely have regained nearly 7,000 jobs, according to AEDC.
Elwood Brehmer can be reached at [email protected].