Alaska is expected to continue losing jobs in 2018 for the third year in a row, but the losses appear to be tapering, according to a new economic forecast.
Total employment is predicted to drop by 0.5 percent, or 1,800 jobs, this year, the Alaska Department of Labor and Workforce Development said in a report released Tuesday.
Job counts in oil and gas, state government, construction and professional and business services (a category that includes architects, engineers, attorneys and more) are stabilizing after taking huge hits in the first couple years of the current state recession, the labor department said. That's one reason statewide employment losses are slowing, but the ripple effect of those losses continues in other parts of the economy.
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Alaska has been in a recession since late 2015, after oil prices tanked and a multibillion-dollar state budget shortfall ensued. Revenues from oil made up 90 percent of the state's unrestricted general fund revenue for many years.
The biggest hit in this downturn came in 2016, when the state shed 6,300 jobs, according to the labor department. In 2017, Alaska lost an estimated 3,600 jobs.
"Losses are slowing, but recovery will depend on a long-term budget solution," the labor department's report said. Calls to reduce state government costs and the budget deficit "will continue to put downward pressure on job counts."
Statewide, nearly every industry is expected to have some amount of job losses this year. Health care, forecast to add 700 jobs, is the main exception. Manufacturing — the majority of which is in seafood processing — is also predicted to gain 200 jobs.
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Alaska's oil and gas sector — which lost 2,900 jobs in 2016 and an estimated 1,500 last year — is expected to lose another 500 jobs in 2018, the forecast said. The same prediction goes for state government and construction.
Anchorage is expected to lose 1,000 jobs, a smaller amount than the last two years. Alaska's largest city could stop losing jobs by the end of 2018, the report said, but "regaining them will be a long road."
Meanwhile, military construction is expected to lead to a modest gain in Fairbanks, where overall employment is expected to grow 0.8 percent (or 300 jobs). The labor department predicts Southeast Alaska will lose 200 jobs, just slightly fewer than it lost in 2017.
Some economists have cautiously said that the worst jobs hit of this recession may have passed. Employment declines in this downturn are also not as severe as what Alaska suffered through in its 1980s recession.