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Alaska expected to gain jobs in 2019 after 3 years of losses, state says

  • Author: Annie Zak
  • Updated: January 3, 2019
  • Published January 3, 2019

This year is projected to be a turning point for Alaska’s economy after three consecutive years of job losses.

The state is forecast to see slight job growth in 2019, according to the annual employment outlook released this week by the Alaska Department of Labor and Workforce Development. Sectors hit hardest by Alaska’s recession, including oil and gas and construction, are expected to add jobs.

Overall gains likely won’t be big, though. The labor department projects 0.4 percent job growth this year. That’s about 1,400 jobs.

There’s a difference between the end of the state recession possibly being in sight and a recovery, said labor department economist Karinne Wiebold.

“Are we seeing that we might pull out of the recession and stop losing jobs? Yes, we think that’s probably going to happen,” said Wiebold, one of the authors of the forecast. “But we’re far away from saying something like ‘the recession is over.’ ”

Alaska is still “thousands of jobs in the hole” compared to 2014, she said.

The military sector, oil and gas, and tourism are expected to drive growth, the forecast said. The construction industry is set to add the most jobs, with 5.8 percent growth compared to last year. Retail and state and local government are forecast to keep losing jobs this year.

A huge force for projected employment growth is preparation for the arrival of F-35 fighter jets at Eielson Air Force Base in Interior Alaska. That involves “a half-billion dollars in new construction to accommodate the jets,” plus support staff and military members, the forecast said.

“The F-35s are the real game changer for us,” said Wiebold. “We’re getting outside money, a lot of it, at a time we really need that infusion.”

Alaska’s recession started in late 2015, spurred by low oil prices. Employment declined 1.6 percent in 2016 and 1.3 percent the year after that. A preliminary estimate from the labor department shows Alaska had a jobs loss of 0.7 percent 2018. Retail was the biggest loser last year.

This downturn hasn’t caused nearly as much hurt as Alaska’s big economic crash during the 1980s, when an oil bust led the state to hemorrhage jobs. Still, most industries have felt a squeeze.

The oil and gas sector was one of the worst hit during the most recent downturn, losing 5,500 jobs after a peak in 2014. That industry is expected to add 300 jobs — 3.2 percent — in 2019, with activity picking up “despite lackluster oil prices, with a number of projects on the near horizon," the forecast said.

The labor department projects the leisure and hospitality sector will grow 1.4 percent, retail and manufacturing will each decline 0.8 percent, and professional and business services (fields including architecture, accounting and legal services) to drop 0.7 percent.

Health care — forecast to grow 1.3 percent — has been a reliable bright spot throughout the recession, but now job growth there is expected to moderate, the state predicts.

“I think we saw some real rapid growth in the couple of years after Medicaid expansion and it’s been slowing down in the last couple of quarters,” said Wiebold. “We expect that trend to continue.”

Fallout from the Nov. 30 earthquake that struck Southcentral Alaska is expected to provide “a modest number” of construction jobs through early 2019 for the homes, businesses and roads that need fixing, the state said. There might still be unforeseen effects on employment from the earthquake, said Wiebold.