Consultant Paints Bleak Picture of Alaskan Economy

Dan Bross, KUAC – Fairbanks

Officials shared sobering data on Alaska’s economy at meetings this week in Fairbanks. A study commissioned by a statewide partnership of economic development groups called the Alaska Forward Initiative, tapped consulting companies that looked at things like jobs, income and gross state product.  The organization’s president, Kathryn Dodge, says the data by consultant I.H.S. Global Insights, paints a pretty bleak picture, when Alaska is compared to the rest of the country.

Dodge says Alaska is a victim of its heavy dependence on oil, an industry with production that’s declining at a rate of 6 to 7 percent annually.  She says Alaska’s old image as a state with high incomes is outdated.

Dodge says Fairbanks, where the average income is $34,000, has been below the national average since 1994.  A model of the Fairbanks economy produced by the Fairbanks Economic Development Corporation demonstrates some major challenges.  FEDCO C.E.O Jim Dodson says the interior community, with two military installations, is heavily dependent on government spending.

Dodson says 50 percent of the $5.8 billion that come into Fairbanks annually are from government.  He says Fairbanks, like all Alaska communities, suffers from a lack of manufacturing and other value added production.

Dodson says a study shows Alaskans produce only 4 percent of what we consume.  Dodson and Dodge point to consultant research that cites low levels of entrepreneurship and innovation and a poor business climate, especially in the oil and gas sector.  They say affordable energy is a key to jump starting new development, and hope the economic analysis will be a motivator.  The next step in the continuing local and statewide effort is to develop plans for improvement.

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