Alaska's gross domestic product declined for the fourth year in a row in 2016, the longest downward slide since records began in 1963, according to a new report released this week by the Alaska Department of Labor and Workforce Development.
Alaska's GDP in 2016 fell 5 percent compared to the previous year, down to $50.7 billion. The figure has been on the decline since its peak of $60.9 billion in 2012, according to the report, which uses figures from the U.S. Bureau of Economic Analysis.
That drop last year is due to Alaska's recession, which took hold in late 2015, and "nearly all of the loss has been attributable to the oil and gas sector," the report said. Alaska has never before had a slide in GDP — the value of goods and services the state produces — that lasted more than a year.
Economists often shy away from relying on state-level GDP as a reliable economic indicator. The lines can blur more easily when measuring the incoming or outgoing goods to or from a state compared to the country as a whole, said state economist Alyssa Rodrigues.
Still, Rodrigues said, the fact that Alaska's GDP has dropped for four years in a row is notable.
"Once you've had year over year over year of losses, you can see there's something going on," she said. "But it's not like this data came out and we said, 'OK, now we're in a recession.' It's more underscoring what other data were telling us."
Drawing conclusions based on just one year of Alaska's GDP can be a bad idea, Rodrigues said. The figure is very volatile here because oil prices have a massive impact on it.
“It’s very commodity price-driven,” said Karinne Wiebold, another state economist. “It’s reflective of market conditions outside of the state’s control. But when we have four straight years of decline and we’re all aware of the oil price drop and its consequences on the state’s economy, that’s why we’re looking at it now.”
Alaska's mining sector — 90 percent of which is represented by the oil industry — comprised about 14 percent of the state's GDP in 2016, the report said. Between 2012 and 2016, the value of the mining sector dropped precipitously, from $21.4 billion to $7.5 billion.
"In fact," the report found, "oil and gas was the only industry whose GDP value was less in 2016 than in 2012."