people. ideas. success.€¦ · ideas. success. alaska’s place in the world economy: a call to...
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People. Ideas. Success.
Alaska’s Place in the World Economy:
A Call to Action
Presented by:
Scott Minerd, Chief Investment Officer
Guggenheim Investments
March 2, 2012
GDP Comparison – U.S. vs. Arctic Regions
Source: BEA, Haver Analytics, Guggenheim Investments. Data as of 12/31/2010. *Note: Gross State Product (GSP) for Alaska.
$1,577 $1,480
$459 $413 $310
$239
$49 $13 $0 Bn
$500 Bn
$1,000 Bn
$1,500 Bn
$2,000 Bn
U.S. Overall
Canada Russia Sweden Norway Denmark Finland Alaska Iceland
2010 Nominal GDP* in U.S. Dollars Comparison – U.S. vs. Arctic Regions
$15,000 Bn $14,587 Bn
GDP per Capita – U.S. vs. Arctic Regions
Source: BEA, Haver Analytics, Guggenheim Investments. Data as of 12/31/2010. *Note: Gross State Product (GSP) for Alaska.
$85 K
$69 K
$56 K
$49 K $47 K $46 K $46 K $45 K
$10 K
$0 K
$20 K
$40 K
$60 K
$80 K
$100 K
Norway Alaska Denmark Sweden U.S. Overall
Iceland Canada Finland Russia
2010 Nominal GDP* per Capita Comparison – U.S. vs. Arctic Regions
Economic Growth in the Arctic Regions (2000 – 2010)
Source: BEA, Haver Analytics, Guggenheim Investments. Data as of 12/31/2010. *Note: Gross State Product (GSP) for Alaska.
**CAGR is Compounded Annual Growth Rate
Real GDP* Comparison
(Normalized to 2000 = 100)
Real GDP 10-Year
(CAGR**, 2000 – 2010)
4.8%
2.8%
2.2% 2.1% 1.9% 1.9%
1.6% 1.5%
0.6%
0%
1%
2%
3%
4%
5%
6%
Alaska
U.S.
Russia
Norway
Denmark
Sweden Canada
Iceland
100
110
120
130
140
150
160
170
Ten-Year Real GDP Growth by Industry
Source: BEA, Guggenheim Investments. Data as of 12/31/2010. *Note: CAGR is Compounded Annual Growth Rate
-6% -4% -2% 0% 2% 4% 6% 8%
Educational services
Construction
Utilities
Accommodation and food services
Agriculture, forestry, fishing, and hunting
Government
Transportation and warehousing
Retail trade
Real estate and rental and leasing
Natural Resource Extraction
Wholesale trade
Manufacturing
Health care and social assistance
Finance and insurance
Professional, scientific, and technical services
Information
Alaska
U.S.
Real GDP Growth by Industry – U.S. vs. Alaska (2000 – 2010 CAGR*)
Alaska – Contribution to Economic Growth
Source: BEA, Haver Analytics, Guggenheim Investments. Data as of 12/31/2010.
Cumulative Changes in Real GSP of Alaska (2000 – 2010)
Source: BEA, Haver Analytics, Guggenheim Investments. Data as of 12/31/2010.
-$3 Bn
$0 Bn
$3 Bn
$6 Bn
$9 Bn
$12 Bn
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Other Industries
Natural Resource Extraction
Government Budget Balance as a Percent of GDP
Source: Haver Analytics, Guggenheim Investments.
Government Budget Balance as a Percent of GDP (2010)
-9.3% -8.5%
-5.7%
-4.7% -4.0%
-2.1%
0.4% 1.1%
5.0%
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
Iceland U.S. Denmark Finland Russia Canada Sweden Alaska Norway
Government Budget Balance as a Percent of GDP
Source: Haver Analytics, Guggenheim Investments.
Government Budget Balance as a Percent of GDP
U.S.
IMF G7 Countries
Alaska
Average of Arctic Regions
-12%
-8%
-4%
0%
4%
8%
12%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Government Debt as a Percent of GDP
Source: Haver Analytics, Guggenheim Investments. *2009 Data for Iceland
Government Debt as a Percent of GDP (2010)
1.4% 6.8%
26.6% 32.0% 33.7%
39.1% 39.3%
78.6%
92.2%
0%
20%
40%
60%
80%
100%
Alaska Russia Norway Canada Sweden Finland Denmark Iceland U.S.
Government Debt as a Percent of GDP
Source: Haver Analytics, Guggenheim Investments.
Government Debt as a Percent of GDP
U.S.
Alaska
Average of Arctic (ex. Russia due to discontinued data)
IMF World Average
-10%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Unemployment Rates Across Arctic Regions
Source: Haver Analytics, Guggenheim Investments. Data as of 1/31/2012.
Unemployment Rate Comparison
3.3%
6.0% 6.3%
7.3% 7.5% 7.5% 7.6%
7.8%
8.3%
2%
3%
4%
5%
6%
7%
8%
9%
Norway Russia Iceland Alaska Finland Sweden Canada Denmark U.S.
Alaska – Gross State Product Breakdown
Source: BEA, Haver Analytics, Guggenheim Investments. Data as of 12/31/2010.
Natural Resource Extraction
30%
Government 17%
Finance, Insurance, Real
estate and Leasing
12%
Others 10%
Transportation and Warehousing
8% Construction and
Manufacturing 7%
Retail and Wholesale Trade
7%
Healthcare and Social Assistance
5%
Professional, Scientific, and
Technical Services
4%
Alaska’s Gross State Product (GSP) Breakdown – (2010)
The Importance of the Oil Industry to Alaska’s Economy
Source: Scott Goldsmith – Oil Pumps Alaska’s Economy to Twice the Size, - But What’s Ahead? February 2011.
Others 50%
Jobs from oil production
and state oil revenues
34%
Spinoff jobs from oil wealth 16%
Alaska Employment Breakdown
Share of Jobs in Industry
Depend on Petroleum
State Government 75%
Local Government 57%
Finance/Real Estate 33%
Communications/
Utilities 32%
Trade 27%
Construction 27%
Transportation 23%
Oil Production In Alaska
Source: Alaska Division of Oil and Gas. Data as of 12/31/2010.
Alaska Oil Production (Millions of Barrels)
0
100
200
300
400
500
600
700
800
Oil and Natural Gas Reserves
Source: U.S. Energy Information Administration, Division of Oil and Gas of Alaska, BP Statistics.
Oil Reserves
(Billion Barrels)
Reserve /
Production
Natural Gas Reserves
(Trillion Cubic Meters)
Reserve /
Production
US 30.9 11.3 7.7 12.6
Canada 32.1 26.3 1.7 10.8
Norway 6.7 8.5 2 19.2
Denmark 0.9 9.9 0.1 6.4
Russia 77.4 20.6 44.8 76
Sweden -- -- -- --
Finland -- -- -- --
Iceland -- -- -- --
Alaska 4.7 21.4 36 11.2
Alaska – Transportation
Source: Airports Council International
2 Million MT 3 Million MT 4 Million MT 5 Million MT
Louisville (U.S.)
Narita (Japan)
Dubai (UAE)
Frankfurt (Germany)
Paris - Charles de Gaulle …
Ted Stevens Anchorage (U.S.)
Incheon (S.Korea)
Shanghai Pudong (China)
Memphis (U.S.)
Hong Kong (China) 23.2%
5.9%
27.1%
16.1%
33.1%
16.8%
20.5%
17.8%
17.1%
11.1%
YoY % Cargo Traffic (Metric Tons)
World’s Busiest Airports by Cargo Traffic (2010)
Export of Goods as a Percent of GDP
Source: Haver Analytics, Guggenheim Investments. Data as of 12/31/2011 for Sweden, Norway, and the U.S., and as of 12/31/2010 for the
other regions
Exports as a Percent of GDP Comparison
8.5% 9.8%
24.9% 27.1%
28.9% 30.9%
32.9% 34.7%
36.5%
0%
10%
20%
30%
40%
Alaska U.S. Canada Russia Finland Denmark Norway Sweden Iceland
Export Growth in Alaska
Source: Haver Analytics, Guggenheim Investments, U.S. Census Bureau.
Nominal Exports of Goods from Alaska
$2.5 $2.5 $2.5
$2.7
$3.2
$3.5
$4.0 $4.0
$3.5
$3.3
$4.2
$2 Bn
$3 Bn
$4 Bn
$5 Bn
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Favorable Demographic Composition in Alaska
Source: U.S. Census Bureau, Haver Analytics, Guggenheim Investments. Data as of 12/31/2010.
37%
15%
21% 20%
8%
34%
13%
21% 19%
13%
0%
5%
10%
15%
20%
25%
30%
35%
40%
<25 25-34 35-49 50-64 65+
Alaska U.S. Overall
Population by Different Age Groups as a Percent of Total Population
Education in Alaska
Teachers per 100 Students –
Elementary & Secondary Education
Source: National Center for Education Statistics. Data as of 2009 – 2010.
High School Dropout Rate
Source: National Center for Education Statistics. Data as of 2007 – 2008.
Bachelor’s Degree or Higher
as a % of Persons Age 25+
Source: U.S. Census Bureau. Data as of Year 2010
Graduate Student Enrollment Ratio –
Postsecondary Education
Source: U.S. Census Bureau. Data as of Year 2010
6.14
6.50
6.0
6.2
6.4
6.6
Alaska U.S. Average
8.6%
14.0%
8%
10%
12%
14%
16%
Alaska U.S. Average
7.3%
4.1%
0%
2%
4%
6%
8%
Alaska U.S. Average
27.0%
27.9%
26%
27%
27%
28%
28%
Alaska U.S. Average
8.3
12.3
6
8
10
12
14
Alaska U.S. Average
Business-Performed R&D
as Share of Private-Industry Output
Patents Awarded per 1,000 Individuals
in Science & Engineering Occupations
Research and Development in Alaska
Source: National Science Board and National Science Foundation. Data as of Year 2007 Source: National Center for Education Statistics. Data as of 2007 – 2008
Source: National Science Board and National Science Foundation. Data as of Year 2008 Source: National Science Board and National Science Foundation. Data as of Year 2007
0.7%
2.6%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
Alaska U.S. Average
0.2%
2.2%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
Alaska U.S. Average
1.5
13.4
0
3
6
9
12
15
Alaska U.S. Average
R&D as Share of Gross State Product (%) Science & Engineering Graduate Students
per 1,000 Individuals
Recent Investment Developments in the Arctic Regions
Source: Bloomberg, Guggenheim Investments. Data as of latest available as of 2/29/2012.
Date Activity
Sep-05 Russia to spend $2.5 billion on Arctic port to boost oil shipments
Jan-08 Russia plans Arctic tidal power plant to boost renewable energy
Aug-08 Iceland to offer Arctic offshore drilling licenses
Oct-10 Russia's Norilsk Nickel plans $20 billion program to boost arctic output
Oct-10 Canada is investing $100 million (CAD) over five years to provide the geosciences knowledge necessary
for private sector exploration companies to guide investment decision
Apr-11 Russia's Lukoil to buy 25% of Bashneft Arctic fields for $167 million
May-11 Shell announces offshore drilling plan near northwest coast of Alaska
Jun-11 Greenland is expected to issue more than 200 new prospecting, exploration and mining license permits
in 2011
Aug-11 ExxonMobil reaches deal with Russia and Rosneft to explore the arctic region of Russia for oil and gas
Sep-11 Canada announced $67.3 million for research on Arctic climate change
Feb-12 Canada's Telesat proposes $40 Million (CAD) investment in Arctic infrastructure
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