According to a recent report by the U.S. Bureau of Labor Statistics, Alaska’s unemployment rate in 2017 was the highest for a state in the U.S. While the U.S. unemployment rate increased in 12 states and D.C., Alaska’s annual average unemployment rate was 7.2%, significantly above the U.S. annual average unemployment rate of 4.4%.
Moreover, Alaska reported the lowest employment-population ratio in its series at 61.6%, which is significantly higher than the U.S. ratio of 60.1%. What’s more, Alaska’s job losses in 2017 for December were higher for some sectors compared to in November 2017. The manufacturing sector in particular reported the major job losses; its total jobs decreased from 10,200 jobs in November 2017 to 9,100 Jobs in December.
The trade, transportation, and utilities sector observed a decline of 300 jobs. Other services and government sectors had 200 job losses each, while the Mining and Logging and Education & Health Services sectors both reported a loss of 100 jobs.
Alaska’s Job Losses Trend in 2018
Alaska’s unemployment rate in 2017 was alarmingly high, and it has been predicted that Alaska’s job losses in 2018 will not be much better, only appearing to taper. Total employment is forecasted to drop by 0.5% in 2018, which will impact 1,800 jobs. A fall of 1.9% and 1.1% was reported in 2016 and 2017, respectively.
Alaska’s job losses were the highest in 2016, when the state’s economy lost 6,300 jobs; state government jobs and the oil industry experienced the greatest impacts. In 2017, the state observed an estimated decline of 3,600 jobs. If the prediction for 2018 comes out to be true, then Alaska’s total job losses from 2015 to 2018 would total 11,700.
Alaska’s Oil and Government Jobs
When oil prices dropped in late 2014, the state government was the first to be affected by falling tax revenue from the oil and gas industry. It destroyed a significant portion of state’s income.
Alaska’s oil and gas industry is predicted to lose an additional 500 jobs in 2018, which represents 5.1% of the industry’s overall employment. Though multiple future projects have been announced, they are long-term plans and the resulting hires from them would be minor for this year.
The state government is forecast to lose another 500 jobs in 2018, which would account for 2.1% job losses.
Alaska’s Construction Jobs
Construction jobs depend heavily on the oil and gas industry. That said, the construction sector is predicted to lose “only” 500 jobs in 2018, which is less than 2016 (1,400) and 2017 (1,200) due to the bulk losses having already taken place.
Moreover, Alaska’s budget is down in fiscal year 2018. As a result, oil- and gas-funded construction projects may not increase this year.
Alaska’s Professional and Business Services
The professional and business services sector, which is closely linked with the construction and oil and gas sectors, has also suffered from a lack of projects. It is predicted that this industry will lose 400 jobs this year because of continued low demand for the services related to the engineering, design, and accounts.
Job Losses in Anchorage
Anchorage, a unified home rule municipality in Alaska, has lost about 5,000 jobs in the last two years, and more job losses are expected in 2018.
It has been forecast that oil and gas jobs based in Anchorage will be balanced in 2018 due to the enormous job losses in the prior two years.
In 2017, construction-based industry in Anchorage lost 400 jobs, with the loss of 300 more expected in 2018. Professional and business services in Anchorage were the hardest hit in the past two years, with a loss of 2,000 jobs. These losses are predicted to slow in 2018.
Overall, the job losses in 2018 will not be as high as the previous year. As a result, the unemployment rate should be less compared to Alaska’s unemployment rate in 2017.
“Regional and State Unemployment, 2017 Annual Average Summary,” Bureau of Labor Statistics, February 27, 2018.
“Economy at a Glance,” Bureau of Labor Statistics,” Bureau of Labour Statistics, last accessed March 5, 2018.
“Alaska’s Economic Trends 2018,” 2018 Alaska Economic Trends, last accessed March 5, 2018.