State economist talks numbers at Palmer forum

PALMER — The booming Matanuska-Susitna Borough continues to be a dynamic place to live, work and raise a family, but the state’s future fiscal climate could bring unknown changes to this region of the state as it could any other, state economist Neal Fried told a crowd nearing 100 people Thursday night at the Glenn Massay Theater in Palmer.

Fried, sporting his signature bow tie and wit and armed with some 50 slides, outlined some surprising numbers on wages, housing and demographics during a roughly hour-long presentation sponsored by Northrim Bank.

“I think more articles on the Mat-Su have been written than anywhere else — I’ve been told I can’t write any more,” Fried quipped at the beginning of the presentation. “But I can’t because the area is growing so fast.”

He noted that the program wasn’t an official economic forecast.

“Times are different, there’s no doubt about that,” he said, adding that the Mat-Su has achieved a significant milestone as of 2015: the population climbed over 100,000 people, making the borough the second largest in the state. Overall, Fried said, population growth has slowed both statewide and in the borough in the last five years.

He said over the last three years, Anchorage “pretty much flatlined” in growth, while the Mat-Su Borough has experienced significant expansion in many areas, especially in health care, which has added more than 1,000 jobs in the last 10 years. According to Fried, manufacturing in the Mat-Su also has shown some of the highest percentage growth — some 93 percent in 10 years — with 627 jobs added. The Mat-Su Borough School District remains the region’s biggest employer, Fried said, with other significant percentage gains going to the finance and social assistance sectors.

“Health care grew not only on a percent basis, very rapidly, but also in a numeric sense,” Fried said. “And you all have seen this — you have seen the new clinics as our population ages. More services are being provided locally.”

He said while retail has shown slow growth statewide, the leisure and hospitality industry — bars, restaurants and hotels — has grown significantly

“We spend half of our food dollar away from home,” Fried said. “And the Valley is no exception.”

Some 55 percent of residents work in the borough, while 30 percent work in Anchorage and 9 percent work on the North Slope, Fried said, with individual average earnings coming in around $40,656 annually. The Anchorage average is $55,320. The percentage of borough residents who commute to Anchorage has fallen, Fried added.

According to Fried’s statistics, the highest paying jobs for borough residents come from the oil and gas industry, with workers earning an average of $100,584 annually. According to 2014 statistics, 3,581 borough residents work on the North Slope, Fried said, a number that grew by more than 2,000 in 10 years.

“The earnings of that 9 percent represent about half of (the earnings of ) the 55 percent,” Fried said. “That’s amazing, and just remember that when talk of the future comes up.”

The Mat-Su supplies the second-largest group of people that work on the North Slope, Fried said.

“This is a very significant recent trend,” Fried said. “It’s much more likely that you have a neighbor that works on the Slope here than anywhere else in the state.”

In the housing sector, Fried said that starting in 2004, more new housing units have been built in the borough than anywhere else in the state.

“You have 14 percent of the state’s population, but are building 37 percent of all new housing units,” Fried said. “And that has been true for quite a while. It is pretty amazing.”

He added that the age of the housing is totally different from the state’s overall or even Anchorage.

“Over half of your housing has been built since 1990,” Fried said, “but a third of that has been built since 2000.”

Regarding the region’s population, Fried said growth in school enrollment has been anomaly for the borough compared to the rest of the state, with other regions showing a decline while the Mat-Su Borough School District has shown a growth rate of 42 percent over the last 15 years.

“In absolute numbers, you have over 5,000 more kids going to school in the Valley today than you did in 2000,” Fried said.

Other population numbers included a chart from Fried that showed growth by geographic region in the Valley in the last five years, with the Gateway area near the Glenn-Parks highway interchange showing the highest percentage growth at 24 percent. Some 6,903 residents live in the region. The Knik-Fairview area grew by 18 percent during the period and has a current population total of 17,617.

Fried said the current population by age was much more evenly distributed as compared to the 1980s. The senior population is currently around 10 percent.

“There are more 80-plus year-olds in the Valley today than there were seniors in 1985,” Fried said.

Looking ahead, Fried said forecasts can be problematic, but added that the current drop in oil prices and its affect on the state was the biggest challenge for the economy.

“One of the consequences of this is how the oil industry is going to react to low oil prices,” Fried said. “I don’t know how that will play out but oil industry employment in the country is dropping back down to 2012 levels already.”

Fried said compared with other oil-producing states, Alaska employment wasn’t dropping as much, but it is falling.

“The oil industry in the state is forecast to lose about 1,000 jobs in 2016,” Fried said. “I think that is maybe a conservative forecast. But we don’t know.”

Fried said cuts to state government jobs would come into sharper focus as legislative budget discussions progress into the spring. He added that ongoing military reductions are also a concern.

“The challenges are going to be there, but to what extent I don’t know,” he said.

Contact reporter Steven Merritt at 352-2269 or steven.merritt@frontiersman.com