ANALYSIS:

• The general upward trajectory in the first few years indicates a steady recovery from the effects of the 2008 financial crisis, both here in Alaska and across the country.

• The high mark for the index of 61.9 was measured in September 2014. While the price of oil had begun a decline (average price in Sept 2014 – $87), Alaska was wrapping up a period of 2-3 years when the price of oil was consistently around $100/barrel, there was robust oil & gas employment, and state coffers were full.

• By February 2016, the price of oil hit $21/barrel and trouble was afoot. In the order of 3,000-5,000 energy sector jobs were lost in Alaska between 2014-2016. The next survey in our series, in March 2016, showed our first sub-50 index score.

• The final years of the Walker administration in 2018 saw the index recover up into the high 50’s again, with 56-57 measures in June, September and December 2018.

• The sharp (but temporary) dip down to 51.7 in June 2019 was likely due to newly-elected Governor Dunleavy’s slash-and-burn budget cuts proposed in the spring of that year, followed by the Recall Dunleavy effort and ultimately a substantive walk-back of the most severe cuts.

• Then… Covid, and index scores started swinging all over the place! But there’s method in the madness. The first precipitous drop down to a new-low index score of 43.8 came in the midst of the most severe lockdown period, between March-May 2020. Unemployment in Alaska rose to about 12% at this time.

• By the summer and fall of 2020, coronavirus cases and deaths nationally had declined, the most stringent period of lockdown was over, and things briefly looked like they might be getting back to normal. Index up to around 50… briefly.

• January 2021 saw the largest peak of deaths from Covid in the United States. It wasn’t a super-big peak by cases, but over 300,000 people died in the six-month period over that winter. The index fell to a another low of 44.8 at the end of 2020.  Not as low as in March, but almost.

• Early-to-mid-2021 also saw a massive economic boost from the American Rescue Plan, which saw the majority of Covid stimulus funds disbursed. This, along with the almost complete disappearance of the 2020-2021 winter peak saw Alaska confidence raising again, back up to an almost-normal level of 54.0 in the summer of 2021.

• Then… Omicron hit. Less deadly, but a huge surge in cases in the 2021-2022 winter months. This sent the index sub-50 again, from which it hasn’t recovered in all the years since.

• Inflation hit next. It had been climbing steadily though 2021, but took a little time to be really felt. US inflation hit a peak around 9% in June 2022, which sent the index on a slide, hitting a new low of 42.6 in September 2022.

• In the 3.5 years since, even though Covid is reasonably a thing of the past, and the inflation rate is back to normal, the index has not recovered. Alaskans are as pessimistic about economic conditions in Alaska today as they were in the depths of the worst winter Covid months. The most recent reading of 42.6 is only 0.2 higher than the lowest of the lows, a 42.4 reading in October 2023.

Questions, comments and interview requests to:

Ivan Moore, ASR principal

Tel: 907-727-7116

Email: [email protected]