Anchorage Economic Development Corp. detailed slow but steady growth for the Anchorage economy at its annual 3-Year Outlook Luncheon, which drew a crowd of more than 1,500 people Wednesday at the Dena'ina Civic and Convention Center.
AEDC is a private Anchorage organization that supports and tracks the growth of business in the state's largest city. Its 13-page report, released Wednesday, details what AEDC believes to be the fate of the Anchorage economy into 2017.
The report contains information about job growth, sector-by-sector breakdowns of the local economy, and potential hurdles faced by businesses. And while AEDC said the Anchorage economy is growing -- at a rate of between .04 and .08 percent this year, depending on seasonal job numbers -- low unemployment and a housing shortage could pose problems for Anchorage's economic future.
Jobs: By the numbers
Anchorage's unemployment numbers have hovered around 5 percent for the last few years, according to AEDC, which reviews numbers provided by the Alaska Department of Workforce and Labor Development to make its annual three-year economic forecast. The national average has ranged from a high of 10 percent unemployment in October of 2009 to 6.1 percent in June of 2014, according to statistics from the U.S. Department of Labor.
While Anchorage's number seems good compared to the national average, it may mask a potential problem for employers.
"(Five percent unemployment is) actually, in a way, overemployment," AEDC President and CEO Bill Popp said. "It’s a very odd term. And so what we've got is another headwind we are facing: a lack of candidates in Anchorage to fill jobs of varying skill sets. And that is actually detrimental to our overall employment."
Popp said Anchorage lost more than 900 federal and local government jobs (including teaching positions) in 2013. But the private sector, led by a resurgence in the retail industry, gained about 1,300 jobs for a net increase of 400. That increase is expected to continue, slowly, into 2017, according to Popp.
Population surpasses 300,000, housing hard to find
The AEDC report also shows that 2013 was the first year that the Anchorage population exceeded 300,000. AEDC predicts that the Anchorage population will continue to grow slowly and crest at 313,000 residents in 2017.
But it isn't an influx of Outsiders that is causing Anchorage to grow. According to figures from the Alaska Department of Labor and Workforce Development, more people moved away from Anchorage than moved to the city in 2013. Local births made up the difference and contributed to a total population growth of about 2,700 in 2013, according to the state.
The steady growth of its population is causing a housing crunch in Anchorage. Low vacancy rates are among the leading reasons it is hard to find people to fill jobs in the city, and what the market does have to offer is expensive.
According to the U.S. Cost of Living Index, Anchorage is the 23rd most-expensive city in the U.S. to live in. That has created financial angst for anyone considering a move to the city for work. And for those who do make it to Anchorage, the housing arrangements can be less than ideal.
"Here in Anchorage, there is such a shortage that when we hire new flight attendants that get stationed in Anchorage, you have multiple flight attendants living in small apartments because of cost and lack of other housing," said Alaska Airlines Regional Vice President Marilyn Romano.
It's a problem Anchorage Chamber of Commerce President and former Alaska Legislator Andrew Halcro knows well.
Halcro said Anchorage needs to look to several local neighborhoods to ease the local housing crunch.
"I am big on downtown and Fairview, because those are the two places in which the next generation wants to live," Halcro said. "They want access to shops, restaurants, and a lot of employees want to ride bikes to work."
Anchorage residents happy with local economy
The AEDC report also includes its take on Anchorage residents and business owners' opinion of the economy of the city. According to the Anchorage Consumer Optimism Index, or ANCi, compiled annually by Northern Economics, people in Anchorage have never felt better about their financial future. The ANCi for the second quarter of 2014 was 63.3 percent, the highest yet recorded. The report measures people's confidence in their own financial situations, the local economy and expectations for the future.
That may be due to the fact that Anchorage's residents have never made more money. According to the U.S. Bureau of Economic Analysis, 2014 will see a record $17.7 billion earned by Anchorage residents. The agency predicts that number to grow to more than $20 billion by 2017 -- an annual growth rate of 4.7 percent.
The AEDC report also estimated that this year's Alaska Permanent Fund dividend could be more than 50 percent higher than last year's check, although the head of the Alaska Permanent Fund Corp. says that increase will probably be closer to 100 percent. In 2013, more than 630,000 eligible Alaskans received the annual disbursement, which last year came to $900 per resident. AEDC projects that a dividend of $1,500 could inject $180 million more into Anchorage residents' personal income than last year's dividend.
Overall, the AEDC three-year outlook report is good news for local businesses, but in addition to housing shortages and hiring challenges, Anchorage, like the rest of the state, has a future that could rest on the fate of proposed changes to the state's oil tax structure, according to AEDC.
"We are cautiously optimistic that we have a good period of growth facing us," Popp said. "The challenge is the current political environment with Ballot Measure 1, with different uncertainties involved with the national and statewide elections. Until those are sorted out, it's going to be: 'wait and see.'"
Contact Sean Doogan at firstname.lastname@example.org.