From my perspective, confidence is key when it comes to the economy.
Businesses and individuals need confidence, not only in the local and national economies, but also in our community, our government and the future. A lack of confidence can kill an economy. It's easy to lose confidence in today's world, especially when you follow news on any number of topics -- terrorism, war, political in-fighting, global and national economies. Despite all the confidence-shaking news, Anchorage residents and businesses continue to demonstrate their belief in the future.
Each November, the Anchorage Economic Development Corp. (AEDC) administers a survey, taking the pulse of the business community in Anchorage, assessing the level of confidence in the coming year. Similarly, AEDC polls Anchorage consumers each quarter to find out just how optimistic they are.
We recently released the Anchorage Consumer Optimism Index for Quarter 4 of 2013. Northern Economics, Inc. generates the data by polling a random sample of 350 households in the municipality.
Anchorage consumers ended 2013 on a high note. With values above 50 representing relative confidence, Anchorage consumers ended the year at a solid 60.7. Consumers felt good about their own finances, the current economy and the future.
It's great to know that Anchorage consumers are optimistic. And how did their attitudes compare with those of the business community, as it looks ahead to next year?
In Quarter 4 of 2013, AEDC partnered with McDowell Group, for the sixth year in a row, to survey Anchorage businesses about business conditions and business confidence in the Anchorage area.
The 2014 Business Confidence Index showed that yes, businesses feel good about Anchorage. Confidence was slightly below the high watermark set a year earlier, but still came in at a healthy 60.2. Businesses said they expect good sales and profits in 2014; as a result, they will continue to hire and invest in Anchorage.
Confidence is key. While consumer confidence drives demand, business confidence drives investment and hiring. But confidence can be fickle and must be treated with respect. Many factors can drive confidence up or down. In my work, I often find myself countering misinformation or a lack of awareness. Misinformation can undermine confidence. Rumors pop up -- sometimes containing a grain of truth and sometimes with absolutely no basis at all -- and can erode confidence if allowed to fester.
One of our jobs at AEDC is to provide facts and perspectives that support confidence -- when it's warranted. For instance, Anchorage has an extremely low unemployment rate (4.9 percent) and continuing strong private sector job growth (we forecast the addition of 1,200 jobs to the Anchorage economy in 2014). That's good.
Inversely, we also have a responsibility to alert the community when facts suggest problems that can hurt our economy. Two challenges facing Anchorage right now too little affordable housing and an extremely high cost of health care.
In the recent past, during the Great Recession, Anchorage's confidence was severely challenged by bad national economic news. Once we began to understand that Alaska's economy was faring better than the rest of the country, confidence bounced back. Our economy remained relatively stable, not growing or shrinking. Our mantra became, "Flat is good."
Not only do AEDC polls, surveys and reports find that Anchorage is an optimistic and confident city, a recent national Gallup poll reported that Alaska residents are more satisfied and optimistic about their standard of living than Americans in any other state.
We see the confirmation of this everyday, living, working and playing in Anchorage. Our city has a bright future. Of that, I am confident.
Bill Popp is the president and CEO of Anchorage Economic Development Corp. (AEDC). He has spent more than 40 years in the private and public sectors.