Forecast: 2021 job gains won’t replace 2020 losses
Anchorage’s battered economy should rebound strong this year but it will likely take several years to recover what was lost to 2020.
Anchorage Economic Development Corp. CEO Bill Popp said the business group expects the city will add approximately 4,000 jobs this year, which would be the greatest annual employment growth the city has seen in 20 years and equates to about 3 percent growth year-over-year.
However, he emphasized that realizing the positive outlook is contingent upon continued efforts to suppress COVID-19.
“We are counting on the citizens of Anchorage to do their part by wearing masks and getting vaccinated until COVID-19 is a bad memory,” Popp said.
The forecasted strong job gains would still account for less than a third of the 12,400 jobs Alaska’s largest city lost last year alone. On top of that, when it started 2020 was supposed to be the first year of employment growth, albeit modest, following years of recession.
The city’s unemployment rate averaged 8.1 percent last year — on par with the national average — after peaking at nearly 14 percent in April, according to preliminary Bureau of Labor Statistics data compiled in the forecast. Alaska as a whole finished 2020 with an average unemployment rate of 8.7 percent. For comparison, Anchorage averaged 5.1 percent unemployment in 2019, which was slightly below statewide levels.
“To be sure, this will be a long journey to full recovery; we have both the five-year recession and the pandemic to recover from,” Popp noted.
In total, Anchorage has lost roughly 18,500 jobs from a workforce that peaked at just more than 156,000 workers in 2015.
Not surprisingly, the industries hit hardest by government restrictions and general consumer apprehension are expected to add the most jobs in the next 11-plus months — if COVID-19 case counts don’t spike again.
Anchorage’s leisure and hospitality industry is pegged to add 1,700 jobs this year after losing more than 4,300 jobs, or about 25 percent of total 2019 employment in the sector.
The retail, healthcare and transportation sectors are all expected to add approximately 400 jobs this year, which for retail would be the first growth in years but also follows the loss of about 1,300 jobs last year.
The relative dearth of passenger traffic through Ted Stevens Anchorage International Airport last year — down 59 percent through October, according to AEDC — similarly led to the loss of about 1,300 jobs in transportation and logistics, while the volume of cargo passing through the Anchorage airport continue to grow; it was up 15 percent year-over-year through October.
The airport, which AEDC estimates already supports roughly 10 percent of the jobs in Anchorage, should be a source of continued growth with more than $500 million of warehouse and logistics facilities in the works from multiple prospective investor groups.
The many firms in the professional and business services sector, collectively Anchorage’s third-largest employment group, should add 300 jobs with somewhat stabilized oil markets after shedding roughly 800 last year.
Popp called the forecast “good news with a lot of caution,” but added that Anchorage and Alaska still face significant long-term challenges that in some ways have been exacerbated by the pandemic. Anchorage’s population is expected to fall by about 2,000 people this year after the city lost more than 3,500 residents last year. The city’s population has declined every year since 2013.
“Population declines are becoming a red flag for future opportunities for growth,” Popp said.
As it stands, Anchorage has lost approximately 4 percent of its population since peaking at about 301,200 residents in 2013, according to state Labor Department figures.
Additionally, Popp echoed a refrain common in his economic outlook presentations of recent years; that lawmakers need to reach a long-term solution to the state’s structural budget deficit this year. He said among Anchorage business leaders the sustainability of the state operating budget is equally as important to the city’s economy as ending the spread of COVID-19, according to AEDC’s annual business confidence survey.
Elwood Brehmer can be reached at [email protected].