Most Alaskans are still mired in a stagnant COVID-19 recession.
But not in Mat-Su, where things are perking along.
This is a bit of a mystery to state economists, who are puzzled at how well the Matanuska-Susitna Borough economy is doing relative to Anchorage and the rest of the state. In the first six months of 2021 there have been 2,100 jobs added in Mat-Su from the same period of 2020, compared with essentially flat growth in Anchorage and elsewhere in the state.
Neal Fried, economist with the state Department of Labor and Workforce Development, told the borough assembly in a briefing that even in pandemic-impacted 2020 jobs losses in Mat-Su were mild compared with Anchorage and elsewhere.
Anchorage lost 12,400 jobs in 2020 or 8.2 percent of its workforce. There is a slight recovery in 2021 of 300 jobs, or 0.2 percent, Fried said.
What’s puzzling about the durability of Mat-Su’s jobs, he said, is that most employers in the region are in services, which were hit hard elsewhere in the state. Also, jobs in oil and gas jobs are included in this mix.
In a normal year about 6 percent of Mat-Su workers commute on rotation to jobs on the North Slope. There were large layoffs in 2020 on the slope, with very little job recovery so far. Other parts of the regional economy have to be strong enough to offset this.
Even amid the pandemic last year retail jobs in Mat-Su grew, contrary to what happened in Anchorage and elsewhere the state, Fried said. Other data, like Unemployment Compensation or UIC claims, tend to confirm that Mat-Su is riding through the COVID-19 recession in better shape than most Alaska regions.
There were fewer unemployment claims in the region, relative to the size of the workforce, than in Anchorage and elsewhere. Unemployment in Mat-Su and much of the state has now returned to 2019 levels.
Employers are still having trouble finding workers, “but you can’t blame this on generous unemployment anymore,” Fried told the assembly.
Scarcity of labor is a complicated topic that includes the shortage of child care, which reduces the ability of adults to rejoin the workforce, but another factor is the reluctance of people to go back to work in occupations like food service where there is a lot interaction with unvaccinated people.
Fried also told the assembly, however, that declining “labor force participation,” or the number of adults wanting to work, has been declining in Alaska for several years. “Even prior to the pandemic this has been happening across all age groups. But now, in the pandemic, it has become extreme,” he said.
The labor crunch is now seen as a threat to the 2022 tourist season. Cruise ship bookings are looking up but companies planning to reopen hotels and restaurants are deeply worried about an inability to hire enough staff.
Despite that cloud on the horizon, things are looking up for Mat-Su in many areas. Home sales in the borough are up in the first half of 2021 to 1,016 compared with 824 for the same period of 2020. There were 1,979 home sales for all of pre-pandemic 2019.
The average price of a single-family house in Mat-Su for the first half of the year was $366,124, according to Multiple Listing Service data, Freid told the assembly. Anchorage home sale prices averaged $447,875 for the same period. That means the region still offers more affordable housing than Anchorage, which has traditionally drawn population to the Mat-Su.
“The valley housing price advantage has changed little since the early 2000s,” Fried said.
New homes built in the valley did dip in 2020, an effect of the pandemic, to 617 compared with 807 in 2019 and 813 in 2018. “But the valley still builds the largest share of new home in the state, or 40 percent, even though it has only 15 percent of the state population,” Fried said.
Mat-Su’s population also grew in 2020, although slowly at 523 new residents. That’s well below the 2,000-plus annual growth from 2010 to 2015 but still positive compared with much the state, which lost population.