AEDC chief offers positive outlook on economic realities

WASILLA — The man with the finger on the pulse of the largest economic center in the state told the Wasilla Chamber of Commerce Tuesday that dire predictions about the decline of the regional and state economy have yet to be realized.

Bill Popp, president and CEO of the Anchorage Economic Development Corp., told the chamber that while the slide in oil prices and legislative gridlock over a fiscal plan do have immediate ramifications, the outlook so far is far from a worst-case scenario.

There will be some pain, he said of the state’s current economic straits, but the direction is vastly different from comparisons made to the state’s economic crash in the 1980s. That era was marked with an epic housing and banking collapse that shouldn’t happen in the current climate, he said.

“We are in a far different position than we were in the 1980s and it’s time to stop making that comparison,” he said.

Popp offered up the AEDC’s three-year outlook Tuesday, a similar presentation he made last month to a packed house at the Dena’ina Center in Anchorage.

Popp said what happens in Anchorage does affect the Valley. Some 37,000 people in the Mat-Su Borough claim income from Anchorage, he said. The area also has a high percentage of North Slope workers.

“So there are some ties that bind out here.”

Popp said in 2015, the state added jobs, had 5 percent unemployment and boasted record-high employment in the oil patch.

“In March of 2015 there were 14,800 people directly employed in the oil and gas industry,” he said. Royal Dutch Shell’s Outer Continental Shelf exploration program made up for some of that gain. The company later canceled its drilling plans.

As for winners and losers in the job market in 2015, Popp said healthcare has seen marked growth statewide as well as in Anchorage. Transportation has shown gains as well, much of it related to air cargo. Federal employment is also showing current growth, he added.

“It (healthcare) has been the number one performer overall in the last decade and has added almost 5,000 jobs to Anchorage’s job base,” Popp said. He said much of the recent growth could be due to the resolution of lawsuits against Medicaid expansion in the state, which has given employers in healthcare confidence in growth in demand for services.

Popp said once the price of oil plummeted in the fourth quarter of 2015, sectors that have taken the biggest hit have been in state government, professional and business services and the oil and gas industry.

“That’s when the layoff notices came,” he said.

The state has shed some 1,700 positions through the end of June compared to the previous two years.

“We are being led to believe to expect another 400 jobs lost during the current fiscal year that just began in July. These are breathing bodies not drawing a paycheck,” Popp said.

“In the month of June, we were down 1,000 jobs in construction, 1,000 jobs in professional and business services and 1,000 jobs in oil and gas in Anchorage — 2,500 on a statewide basis,” Popp said. “That was from the (2015) peak. So, it’s down about 19 percent, and that’s where we are feeling the pain. And we are feeling it in these high-dollar jobs that we value very much.”

He said that essentially, the state has dropped back to late 2011 or early 2012 employment levels.

“We have lost about four and a half years worth of growth,” Popp said, “but we are well above where we were during the low points of 2005.

“Right now were are feeling a very sharp pinch,” Popp said. “It’s going to hurt and it is going to leave a mark. But it’s not the head blow that some people try to portray it as, like it is 1986 all over again.”