Alaska economy in ‘remarkable company’

Most of the Lower 48 is still finding its way back from the economic downturn that saw 5 million jobs slashed from U.S. payrolls since December 2007.

Alaska Department of Labor Economist Neal Fried compared Alaska’s present economic situation to that in the Lower 48 at a Business and Technology Industry Luncheon at the Alaska Job Corps Center Thursday.

Nationally, he told the audience, only North Dakota, Alaska, Texas, Louisiana and New York have seen job growth since the economic downturn began.

“We are in very remarkable company,” Fried said.

Alaska wasn’t spared, but the economic impacts here were ripples instead of tsunamis.

When Alaska’s economy crashed in the 1980s, the Mat-Su Valley was hit hardest, Fried said. That crash nearly 30 years ago is in line with what people in Arizona and Florida are experiencing now, he said.

The crash ended in Alaska in the mid-1980s, when the price of oil began to rebound, Fried said. And for the next 20 years, the state saw steady annual job growth.

But in 2009, for the first time in two decades, the job market declined slightly, Fried said, though not for long. “In 2010, the economy recovered, and I could again say ‘we have more jobs this year than ever before.’”

Oil’s impact on the state’s economy has served as an insulating factor that has shielded Alaska from the economic nosedive seen elsewhere, Fried said.

“We’re very fortunate right now and have been for the past five years,” he said. “High oil prices aren’t good for America, but it’s very good for us here.”

Oil makes up about a third of the state’s total economy, along with the vast majority of state revenue. Federal spending is a third, and everything else is the final third.

But the oil industry is not our largest employer. Health care employs the most people in Alaska, followed by government, leisure and hospitality, social assistance, professional and business services, oil and gas, retail trade, transportation and utilities, manufacturing, financial activities, construction and mining.

Conversely, here are Alaska’s industries listed in order of workers’ annual earnings: oil and gas, mining, construction, transportation and warehousing, professional business services, informational, financial industry, government, health care, manufacturing, retail trade and leisure and hospitality.

Statewide, the average worker earns $47,724 annually, Fried said.

Alaska also benefits from more per capita federal spending than any other state. Although, Fried said spending by the federal government is expected to decline for the next several years.

“Declining federal spending is probably my biggest source of concern for the next four or five years,” he said. “We’re seeing small things so far, but they might get bigger.”

Fried has studied Alaska’s economy since he began working for the Labor Department in 1978. We’d say that makes him an expert.

We only wish more people had been in the room Thursday to hear Fried’s sunny forecast.