Progress 2021: State economist discusses Mat-Su economy

When the COVID-19 pandemic hit last March, various sectors within the Mat-Su Borough economy would respond differently. That variation of business activity in the Valley in comparison to Anchorage and other parts of the state showed upward trending numbers in retail spending, according to Alaska Department of Labor and Workforce Development’s Neal Fried, who works as an economist with the Research and Analysis section. Fried estimated that one of the causal factors for increased retail spending in the Valley over the last year, trending away from what many other areas of the state are doing, has to do with the high concentration of commuters in the Valley buying their groceries at home.

“The really strange one was retail that also increased in 2020 in the Mat-Su Valley which, that was hit really hard most of the state and it was being hit before the covid recession because of ecommerce and other things,” said Fried. “Retail has been growing for a while in the Mat-Su Valley because retail in the Valley reacts to the population.”

While sectors of the Valley economy such as transportation, food service, and government saw job losses in 2020, retail saw growth in the Mat-Su Valley due to a variety of factors. However, Fried warned that growing ecommerce has already begun to encroach on retail sales and may change the way goods are delivered post pandemic.

“I suspect a smaller number of Valley residents were coming to Anchorage and I bet you that was quite significant and that might’ve also boosted local retail consumption, in fact it did because those numbers are big,” Fried said.

Mat-Su Borough Assessor Pat Pickett detailed trends in the Mat-Su Valley housing market when presenting the report on assessment of taxable property in the Valley to the Assembly in January. Pickett noted that houses are selling faster than ever before in the Valley.

“One of the stories of positives was basically the real estate market, especially residential real estate,” said Fried. “Unlike the rest of the state, population has continued to grow in the Mat-Su Valley and migration has continued to be positive, although it was slightly negative in 2020 for the first time in a very long time.”

Fried said that while the Valley has only 14 percent of the state’s population, 40 percent of the new homes built in Alaska in 2019 were built in the Mat-Su. Fried said that the 2,159 home sales in 2020 was the first time Valley sales had broken 2,000 in five years, and also noted increases in construction.

“I definitely wouldn’t characterize anything as a booming real estate market but the Valley’s economy has also been a little bit different. I talked about the population but you only lost in 2020 500 jobs and you know the rest of the state had a significantly bigger hit in most other places than in the Mat-Su Valley, so the recession for the jobs that exist in the Mat-Su Valley didn’t get hit as hard,” said Fried. “Now as we all know and some of the weird things that happened in the Valley that were different than the rest of the state in this recession in 2020 was that healthcare grew.”