Peninsula economy holding steady, strong

Posted: Tuesday, April 18, 2006

The Kenai Peninsula employment market managed to produce only a few new jobs last year, but that wasn’t a reflection of an economic downturn, according to the Alaska Department of Labor and Workforce Development.

Indeed, a healthy peninsula tourism season and a surprisingly strong salmon return that featured a 29 percent increase in seafood processing wages during the third quarter served to hold the local economy steady in 2005, according to state economist Brigitta Windisch-Cole, writing in the April issue of Alaska Economic Trends, a monthly Labor Department publication.

The peninsula is part of an economic zone called the Gulf Coast Region that also includes Valdez-Cordova and the Kodiak Island Borough, areas that actually saw small declines in employment. The peninsula, meanwhile, grew slightly, thanks to job gains registered during the first three quarters of 2005 (fourth-quarter numbers are not yet available). Combined, the entire region posted a net loss of 50 jobs, Windisch-Cole said.

Construction in the region did not quite match 2004, but there were major projects underway that helped boost the peninsula’s employment picture. On the central peninsula, those included the expansion of Central Peninsula General Hospital and replacement of the bridge over the Kenai River at Soldotna. Meanwhile, Seward began expanding its harbor, and in Homer, the residential building boom remained brisk, Windisch-Cole reported.

Part of the slight overall decline in jobs in the Gulf Coast Region can be attributed to the loss of teaching positions due to declining enrollment. That trend is expected to continue, Windisch-Cole said.

The relative health of the peninsula economy and that of the Gulf Coast Region is part of a larger picture, one that puts Alaska high on a national list, according to another state economist, Dan Robinson.

While the pace may be slow and steady, there are few states in the union that can boast Alaska’s record of continual job growth. According to Robinson, 2005 marked the 18th consecutive year in which the number of jobs grew statewide, something only a handful of other states can claim.

“The last time the state lost jobs, Ronald Reagan was president, Steve Cowper was governor, ‘The Last Emperor’ won the Academy Award for best picture, and ‘Walk Like an Egyptian’ topped the pop charts,” Robinson wrote in Trends.

That year, 1987, was the second year of a deep recession in Alaska. The real estate market had collapsed and oil prices had plunged to less than $10 a barrel, Robinson said.

Recovery began around 1988 and picked up speed in 1989 when the Exxon Valdez oil spill cleanup reached a peak, Robinson explained.

“Since 1991, the state has settled into a pattern of generally moderate job growth, averaging 1.8 percent a year,” he said. “In 2005, growth of 1.9 percent improved slightly on the previous two years, but stayed consistent with the long-running pattern.”

Revised unemployment data for 2005 revealed an average monthly rate of 6.8 percent. But that was a drop of .6 percent from 2004, and representative of the lowest unemployment rate since 2001, Robinson reported.

“The actual number of unemployed people declined by more than 1,700 in 2005, indicating a slightly tighter labor market and a favorable environment for job seekers,” he said.

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