Anchorage economic outlook slow to moderate
Consumers in Anchorage are feeling positive. The city’s Consumer Optimism Index has reached a four-year high — 63 out of 100. The score is based on random phone surveys of at least 350 households. But the Anchorage Economic Development Corporation says that doesn’t mean everything is looking up.
The three-year outlook for Anchorage shows only slow to moderate economic growth. On the one hand, data compiled by the economic research organization McDowell Group shows personal income is expected to grow nearly five percent each year for the next three years. Tourism is has reached a record high. Passenger volumes at the international airport are up two percent.
But on the other hand, airport freight volumes will remain steady. “What’s happening is that the industry — the logistics supply chain industry — is getting more efficient,” AEDC president Bill Popp explained to a luncheon on Wednesday. “They’re getting smarter about ordering further in advance. So they’re making use of surface transportation as an alternative to more expensive air cargo. We’re also seeing another interesting effect. We’re seeing these new generation aircraft that can carry more tonnage. So you don’t need as many planes to carry the same amount of tonnage.”
The data does predict a slight increase of 3 percent per year growth at the Anchorage Port, however it’s still much less than it was 10 years ago.
The population of the city will only increase by one percent each year from 2015 to 2017. “This is predicated on fruitfulness locally,” Popp said. “More babies. And it is not predicated on people moving to town. We actually have a net outflow of adults.”
He said it’s partially because of the city’s lack of housing and high cost of living.
As for employment, Anchorage is gaining private sector jobs, but it’s losing almost as many government jobs, primarily from the federal government and from schools. Overall employment is predicted to increase by one percent per year.
Popp said the biggest challenges facing the Anchorage economy are declining oil production and prices because of the revenue and jobs the resource brings to the state.