Mixed economic news: Jobless rate up, but so are sales figures
According to the Alaska Department of Labor and Workforce Development, the Kenai Peninsula Borough is considered to have a "well diversified" economy that includes fishing, seafood processing, tourism, oil and gas, refining and government, and where the retail trade and service sectors continue to grow.
Preliminary numbers show the unemployment average for 2002 was about 10.4 percent -- higher than 2001 and 2002.
The oil and gas production, while nowhere as big as at its peak around 1970, continues to help drive the local economy, due in large part to high wages. Efforts are under way to discover new supplies. Indeed, relatively recent discoveries have staved off an expected decline in employment in the industry, according to the labor department.
Meanwhile, low prices for Alaska salmon have kept that part of the economy in the doldrums, though seafood harvesting and processing remain central to the overall picture, state officials said.
The latest unemployment figures available from the labor department are for November. Typically, wintertime employment drops from the summertime highs. Nevertheless, the rate of unemployment in November 2002 was higher than for the equivalent month of 2001, 11.5 percent compared to 9.6 percent.
While December 2002 numbers are preliminary, when joined with figures for the rest of 2002, it would appear the yearly unemployment average was about 10.4 percent. That's well above the 9.6 average of 2001 and higher than the 10.1 percent chalked up in 2000.
Several economic indicators provide a general picture of the peninsula's economy. The latest estimate puts the borough population at 50,556, an increase of 1.7 percent since the 2000 census.
According to the latest Quarterly Report of Key Economic Indicators produced by the Community and Economic Development Division of the borough, which covered the third quarter of last year, both gross and taxable sales were up overall in 2002 compared to 2001.
However, in the third quarter itself, the data was mixed. There was an overall 4.8 percent decline in gross sales boroughwide, but a 3.1 percent increase in taxable sales, the report said. Homer topped all borough cities in summer season gross sales with a 12.9 percent jump over the previous year.
Soldotna joined Homer in the plus column, but Kenai, Seward and Seldovia registered gross sale declines.
Jeanne Camp, economic analyst with the division and producer of the quarterly report, said Homer's increase in retail and services likely was the result of better tourism numbers, while Soldotna's increase was probably due to its diversified economy.
In analyzing boroughwide gross and taxable sales by industry and comparing them to the third quarter of 2001, the report indicated that for retail sales, the largest industry in the borough, gross sales in 2002 fell .2 percent. All other industries showed double-digit declines.
Finance, insurance and real estate declined 10.4 percent; agriculture, forestry and fishing dropped 13 percent; and manufacturing sales were down 13.8 percent. Construction sales fell 18.2 percent and gross sales in mining marked down 24.8 percent.
But while gross sales were down, for some industries, taxable sales were up.
Retail taxable sales grew 2.2 percent over the same period in 2001. The service sector showed a 3.7 percent increase. Modest gains also were recorded in construction, manufacturing and transportation, communications and public utilities.
Encouraging as it was to see taxable sales increase in retail and services, Camp cautioned that job creation is occurring most rapidly in that sector. That means low-wage jobs are replacing higher-paying jobs in other sectors.
According to the division, the oil and gas industry was a bright spot owing to continued oil and gas exploration activities in Cook Inlet and the re-evaluation of old finds because of new technology.
Contributing to that was the beginning of construction on the Kenai-Kachemak gas pipeline project. It is scheduled for completion in October, and gas should be flowing by January 2004.