A bright outlook for 2004 tourism, a strengthening fishing industry and continued exploration by oil and gas companies are helping the Kenai Peninsula Borough economy rebound, according to the latest borough Quarterly Report of Key Economic Indicators.
The Kenai Peninsula Borough Community and Economic Development Division publishes the report four times a year, analyzing sales, construction, employment, changes in population and other economic factors for the borough and its cities. The latest issue covers the first quarter of 2004.
Borough economist Jeanne Camp noted a slight contraction in gross sales during the first quarter of 2004 compared with the equivalent period in 2003, but she said the small decline could be overcome as late returns are received and processed.
Meanwhile, construction activity was strong. Building permit values for the period increased 220 percent to $16.8 million, boosted by the permit for the new Seward Middle School assessed at $7.5 million. Permits provide only a qualified perspective on the construction trades, however, because only the cities require them. The borough has not passed an ordinance requiring building permits, Camp said.
"The labor force is near all-time highs, as both January and March provided the second highest count in history and February had the third highest count," Camp wrote in the report's executive summary. Labor statistics come from the Alaska Department of Labor and Workforce Development. "Unemployment counts are down for each of the first three months, well down from highs of 1997, and employment is at all-time highs for each of the first three months of 2004."
Camp said the oil and gas industry is "demonstrating strength in diversity."
Unocal is drilling multiple wells and extending the Kenai-Kachemak Pipeline 14 miles to access gas finds at Happy Valley. Marathon Oil has leased tracts in the Kenai River corridor. Forest Oil, Unocal and XTO Energy are active in the search for more resources. Camp noted that for the first time since 1991, the state is offering incentives to encourage exploration in the Cook Inlet region.
"Support industries are anticipating further news regarding the Pebble gold and copper mine owned by Northern Dynasty Inc.," Camp said, adding that potential economic benefits could accrue to the service industry, especially in the service and transportation sectors. Indirect benefits would be expected in employment, increased disposable income and economic stability, she said.
According to the report, the first quarter of 2004 saw a tiny decrease of barely 0.1 percent in taxable sales.
Gains were found in the agriculture, forestry and fishing sector (AFF), which jumped 14.3 percent over 2003 first-quarter results. Also showing increases were manufacturing and retail sales, and government sales.
Mining sales declined, as did the finance, insurance and real estate (FIRE) sector. Wholesale goods also declined, as did the TCPU sector (travel, communications and public utilities).
In the cities, taxable sales fell slightly in Seldovia, Kenai and Homer and the unincorporated area of the borough, while Soldotna and Seward had increases.
The Kenai Peninsula Borough's labor force, which is the number of people working or who are unemployed and looking for work, was 21,684 in January. That increased to 22,018 potential workers in February and dropped to 21,793 in March.
The March labor force was 296 greater than one year ago, the report said, while unemployment that month was 107 less than in March 2003.
While the taxable sales figures show a tiny decline in the first quarter (compared with 2003), the overall 10-year trend shows a 43.3-percent increase over 1994 figures.
During that time, only the mining industry registered an overall decline (32.3 percent) in taxable sales.
All other sectors posted significant gains, with retail sales, at 54.3 percent, leading the way. Government sales actually jumped nearly 267 percent, but they represent such a tiny portion of all taxable sales that they are statistically inconsequential, Camp said.
The latest population figures (2003 estimates) show the borough population at 51,220, a gain of 0.1 percent for the year. Homer grew by 3.6 percent to 4,893, while Soldotna gained 2.9 percent to 4,059.
Kenai's population fell 0.6 percent to 7,125 and Seward dropped by 2.2 percent to 2,733.
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