Economists are predicting that Alaska will add 5,300 jobs in 2023, up 1.7%, a slower pace of growth than the past two years as the state continues to recover from pandemic losses.
In 2021, rebounds from pandemic lows came from reopening’s and massive infusions of federal money through household stimulus checks, enhanced unemployment benefits and direct support to businesses and state and local governments.
Rising oil prices and strong Alaska Permanent fund investment returns that year also raised state revenue projections. The state continued to add jobs last year as students went back to school, cruise ships returned in full, more people traveled and went out to eat and oil prices rose.
The gains will likely come in smaller amounts in 2023 from a wider range of industries, with state economists expecting all Alaska industries to grow or hold steady, according to the report in the January edition of Alaska Economic Trends, an online publication of the Alaska Department of Labor and Workforce Development. The monthly economic reports can be viewed online at www.labor.alaska.gov/trends
Supply chain disruptions from 2021 continued through the past year and while some were corrected, COVID-19 continues to create problems. Future restrictions and supply chair disruptions, especially from China, remain possible, the report said. At the same time worker shortages, the rising cost of labor and inflation that worked against recovery in 2022 are expected to continue to cause friction, the report said.
On the bright side, Alaska does anticipate record numbers of cruise ship visitors in 2023.
After the pandemic halted cruises to the state in 2020, about 100,000 passengers returned in 2021, followed by more fully occupied ships the next year, bringing about 1.2 million people to the state.
Economists also noted that the federal infrastructure legislation will steer billions of dollars to Alaska over the next several years, to pay for roads, bridges, ferries, water and sewer facilities and broadband connections. These projects will create jobs and the improvements will lay the foundation for further economic growth, the report said. Port improvements in Anchorage and development of a deep-water facility in Nome will increase the state’s ability to move goods, possibly on a global scale.
Still, as the state’s economy recovers, the big challenge will be filling open positions, including jobs created by infrastructure spending.
Aging and migration losses, especially of people of working age, will exacerbate that shortage.
Alaska’s total population has been flat, increasing or decreasing by less than half a percentage point annually for most of the last decade. Alaska has historically been a young state and remains so relative to the nation as a whole, but the number and percentage of older people has grown dramatically over the last couple of decades, increasing fivefold as a percentage of the total population. The Alaska birth rate has also fallen during that period.
An older population means a smaller pool of working-age people and a lower birth rate translates to fewer future workers, the report notes. Twenty percent of the jobs in Alaska are filled by nonresidents. While about 10% stay, most come for seasonal or remote industries, including seafood processing, tourism and oil and gas positions. A record number of job openings nationwide means less draw to Alaska for both temporary and long-term work, the report said.
