Anchorage employment appears to be headed toward a seven-year low as the city is expected to lose about 2,200 jobs in 2017, the Anchorage Economic Development Corp. said at an economic forecast event Wednesday.
Every industry is expected to shed hundreds of jobs except for health care, which is predicted to add 400 jobs this year.
Business and political leaders loudly voiced frustrations with Alaska's multibillion-dollar budget deficit and how it is impacting both consumer and business confidence, as well as the economy of the state's largest city.
"The 2017 session of the Legislature must resolve this issue, or the optimistic venues that have been outlined here today amidst the pessimism — much of which is driven by the fiscal circumstances we find ourselves in — all of that can rapidly disappear," Lt. Gov. Byron Mallott said at the event.
It will continue to be difficult for businesses to make investment decisions before state lawmakers come up with a fiscal plan, said AEDC president Bill Popp. He pointed to results of a yearly business confidence index survey prepared by the McDowell Group, released along with the AEDC's annual economic forecast report.
"Ladies and gentlemen, we're in a recession. … Pessimism for the future is marked," Popp told a room full of hundreds of professionals. "You people are done waiting for a solution. You want a solution now because this is not just a fiscal crisis, this is a crisis in confidence, confidence in the future because you don't know what your taxes are going to be."
The business confidence survey analyzed responses from more than 300 businesses and organizations in Anchorage and Chugiak-Eagle River.
AEDC predicted a year ago that Anchorage would lose 1,600 jobs in 2016. That loss ended up being much greater at an estimated 2,700 jobs, by AEDC's measure. A decline in oil prices that began in 2014 continues to have a ripple effect through other industries in the state.
"What we've come to realize is that we were not taking into account what in point of fact was a bubble, an oil-price bubble," Popp said.
The AEDC's overall job loss prediction for Anchorage is lower than that of the Alaska Department of Labor and Workforce Development, which expects a loss of 2,800 jobs.
[2016 was bad for the Alaska job market. 2017 might be worse.]
But there is also room for "cautious optimism" in the future, AEDC's report said.
The city's "unemployment rates remain at generally low levels" — an average of 5.3 percent for 2016, up from 5 percent in 2015.
While business optimism about the overall Anchorage outlook remains low, the report said, more survey respondents expect the economy to fare better this year than last year.
Even in health care, though, the one bright spot, Popp showed some concern.
"I worry about this," he said, referring to expected growth in that field. "We have the makings of a bubble."
The AEDC's economic forecast was sponsored by BP and prepared by the McDowell Group.