State of The State-AK

November 15th-16th, 2017 Alaska Department of Labor and Workforce Development, Research

Section, Neal Fried, Economist

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1.7% 1.5%

0.5% 0.5% 0.4%

-1.8% -1.7%

2011 2012 2013 2014 2015 2016 2017*

Employment Growth Gone In 2016 And Continues Into 2017

*QCEW,June2016comparedtoJune2017

AndEmploymentRecordForAKForThisYear--2017

-5,600

1,800

400

-2,100

-1,500

-900

-900

-700

-100

Total

HealthCare

Local

LeisureandHospitality

Number of Jobs Gained and Lost 1st 6 months 2016 to 1st 6 months 2017

ConstrucKon

Retail

Stategov.

PBS

Oil

67%

82%

89%90%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

Michigan

WestV

irginia

Ohio

New

York

Illinois

Missouri

Rhod

eIsland

Co

nnecKcut

Penn

sylvan

ia

Indian

aMassachuse[

sLouisian

aMaine

New

Jersey

Iowa

Mississippi

Wyoming

Wisconsin

Alab

ama

California

Oregon

Delaware

New

Ham

pshire

Kentucky

Minne

sota

U.S.Average

Kansas

Oklah

oma

Verm

ont

NorthCarolina

Hawaii

Tenn

essee

Arkansas

Geo

rgia

SouthCa

rolin

aWashington

Mon

tana

Marylan

dNorthDakota

Idah

oVirginia

Colorado

Neb

raska

SouthDa

kota

New

Mexico

Texas

Florida

Utah

ALAS

KA

Arizon

aNevad

a

PercentofTimeStateswereAddingJobs,1961-2016

RecessionsAreTypicallyShort

Lessthan1year,17%

1to2years,58%

2to3years,18%

3to4years,7%

Howlongdotheylast?

Ninequarters ThreequartersEightquarters

ButRecoveriesTakeLonger

[CATEGORYNAME],[VALUE]

[CATEGORYNAME],[VALUE]

4to6years,20%

[CATEGORYNAME],[VALUE]

[CATEGORYNAME],[VALUE]

-2.4%

-1.7%-1.9%

-2.2%

-1.4%

-0.7%

January Feburary March April May June

JobLossesInAlaskaMayBeSlowing(Over-TheYearChange2016-2017)

4%

6%

8%

10%

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

U.S.

Alaska

2017

7.2%

4.1%

UnemploymentRates,AlaskaandU.S—January2007toSeptember2017

8.0%

7.0%

1.0%

-5.0%

12.0%

18.0%

-22.0%

66.0%

9.0%

0-4

5-18

16-64

30-39

40-49

50-59

65plus

TotalPopulaKon

TenYearAlaskaPopulaKonProjecKons,2015-2025(whatdoesthismeantoyou?)

65,227

49,348

-23,201

16,134

1,231

-23,201

3,979

3,800

4,108

$-

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

2009 2010 2011 2012 2013 2014 2015 2016 2017*

$344,449in2017

AlaskaHomePricesChangedLi[leInRecentYears

Single Family Homes

*1st2quartersof2017

HomeSalesInAlaskaHaveNotChangedMuch

6,202 6,002

2016 2017

Homesales,statewide,MLS,1st3quartersoftheyear

0

500

1000

1500

2000

1981198219831984198519861987198819891990199119921993199419951996199719981999200020012002200320042005200620072008200920102011201220132014201520162017

NoSignOfAnIncreaseinForeclosuresInAlaska

Source: Alaska Department of Natural Resources

3.8%

11.2%

3.3%

8.8%9.3%

8.0%

3.6%

8.3%

5.9%

9.7%

5.8%5.1%

12.2%

5.7%

11.3%

9.9%

6.9%7.6% 7.5%

4.7%

12.7%

7.3%

ResidenKalVacancyRatesAreTrendingUpwards

2016 2017

12,84313,236

13,485 13,434

12,517 12,468 12,325 12,378 12,33011,964

11,741 11,76412,106 12,035 11,898

10,816

10,36910,150

9,946 9,800 9,652 9,552 9,4439,693 9,563

9,752 9,6459,276

8,923 8,931

PrudhoeBayEmploymentFellHardhistorichighemployment

lowestlevelsince2007

$20

$30

$40

$50

$60

$70

$80

$90

$100

$110

$120

Jan

Feb

Mar

Apr

May

Jun Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

Jun Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

Jun Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

Jun Jul

Aug

Sep

Oct

GoodNewsDeveloping

2014 2015 2016 2017

Priceofabarrelofoil,ANS

The largest onshore oil discovery in America for at least 30 years just happened in Alaska Drilling In The US: Oil discovery In Alaska Largest Found In 30 Years—could flow as early as 2021 BY JULIANA ROSE PIGNATARO @JULIE_PIGNATARO ON 03/09/17 AT 4:03 PM

Alaska gas line agency signs agreement with Chinese oil company, financial institutions •  Author: Nathaniel Herz, Alex DeMarban

•  Updated: 8 hours ago

•  Published 19 hours

Oil production up for second year in a row By: Elwood Brehmer Alaska Journal of Commerce Post date: Fri, 04/14/2017 - 4:38pm

ConocoPhillips Alaska plans largest exploration season in 15 years

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Processing HarvesKng

FishingEmploymentInAKHasRemainedPosiKve

Forrest Bowers, Deputy Director of the Division of Commercial Fisheries characterized the 2017 Alaska salmon season as a banner year for the industry and State of Alaska. The 2017 commercial salmon fishery all species harvest was 224.6 million wild salmon with an estimated preliminary exvessel value of $678.8 million, a 66.7% increase from 2016's value of $407.3 million.

-

200

400

600

800

1,000

1,200

1,400

1,600

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 20162017*

Alaska'sTimberIndustryEmploymentDropsSome

*Basedonfirst6monthsofdata,113,321,1153

MilitaryNumbersAreStable

22,675 23,14121,067

24,44923,195

20,91422,438 23,004

21,98920,838 21,042

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

UniformedmilitaryinAK

1,592

1,8742,109

2,2912,126

2,326

2,720

3,0633,0232,9072,9832,9433,000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017*

Mining Employment Very Stable In Alaska

*preliminary

VisitorIndustry--FullRecoveryAndNowSelngNewRecords

1,000

1,200

1,400

1,600

1,800

2,000

2012 2013 2014 2015 2016 2017

Employmentatsnackandnonalcoholicbeveragebars--averagemonthlyemployment

AK'sCoffeeIndustryConKnuesToPerk

Source:AlaskaDepartmentofLaborandWorkforceDevelopment,ResearchandAnalysisSecWon

15.8

17.0

17.5

18.5

17.8

18.4

16.6

17.4

18.4 18.3

17.9

18.3 18.2 18.2 18.318.0

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Millions of gallons of beer, wine and liquor consumption in AK

Source:AKDepartmentofRevenueFY

Alcohol Consumption In Alaska--Any Pattern?

0

5

10

15

20

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

NoRecessionForOurBreweriesNumberofbreweriesinAlaska

8,8558,352

4,621

959365

2,645

2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

AK'sPopulaKonGrewLotsDuringTheGreatRecessionButNowSlowing(2016populaKonwas739,828)

Annualgains

1,005 1,105

-2,711

-6,512 -6,679

-4,290

2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

AK'sMigraKonStory

2016=41,435movedinand45,725movedoutfornetlossof-4,290

$81,100

$145,800$107,500

$128,000

$220,200

$272,000 $272,600

$512,500

$577,901

$694,364$723,757

Nov Dec Jan Feb Mar May Apr Jun Jul Aug Sep

Monthly marijuana taxes collected by State of AK

Source:AKDepartmentofRevenueFY

Another “Budding Growth” Industry —But Revenues Not Going to Get “High” Enough To Bail Out the Economy

2016 2017

Alaska’sBiggestCurrentChallenge-OilRevenues

$4.4$5.1

$11.3

$6.1 $6.2

$8.1

$9.9

$7.6

$5.7

$2.4$1.6 $1.8

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017*

$billions!

*forecast

Remains a drag on the

economy

Source: Alaska Department of Revenue

WeRemainSolidAkersWhenItComesToOurPickups!

50,000

70,000

90,000

110,000

130,000

150,000

170,000

190,000

210,000

230,000

250,000

20002001200220032004200520062007200820092010201120122013201420152016

Numberofpick-upregistraKonsinAlaska

Source:AK-DMV 2015=$273million,yesmillioninpulltabsand$71millioninbingo

Questions?