In 2017, job losses in Alaska’s ongoing recession spread from the sectors first affected—primarily oil and gas and state government—to the sectors that depend on household spending, including retail trade, accommodation and food services, and leisure and hospitality. Alaska will continue losing jobs in 2018, but at a slower pace— likely in the range of 0.7%. That slower pace isn’t a sign of recovery, but rather an indication that the initial shock of low oil prices has made its way through the economy.
These are among the findings of a new overview of Alaska’s economic and fiscal conditions, by Mouhcine Guettabi, assistant professor of economics at ISER. He also estimates that the the fiscal uncertainty caused by the state’s current lack of a plan for dealing with its huge budget deficit may be reducing capital investment in Alaska by something on the order of $200 million to $600 million a year. The overview also considers the effects of different rates of withdrawal from the Permanent Fund earnings reserve, should the legislature decide to use some of those earnings to pay for government operations.
Download the report, What Do We Know to Date about the Alaska Recession and the Fiscal Crunch? (PDF, 703KB) By Mouhcine Guettabi, with support from Northrim Bank. If you have questions, get in touch with the author at email@example.com or 907-786-5496.