Business Intelligence

Business Intelligence

Job losses continue to slow as economy steadies

Job losses are steadily decreasing to the point that employment may reach a steady state by the end of the year. State labor economist Neal Fried said employment dropped 0.6 percent in the first six months of 2018, compared with 1.5 percent decline for the first half of 2017 and a 1.9 percent drop for the same period of 2016. During July the job count was down 0.3 percent, an indication things may be level by year-end. Construction, an industry hit hard by the recession and cuts in state capital spending, showed a gain of 300, or 1.7 percent, in July.  

Air Force plans $150 million expansion at JBER in Anchorage: U.S. Air Force officials plan a $150 million runway extension at Joint Base Elemendorf-Richardson, or JBER, to alter air traffic and ease jet noise over residential neighborhoods. JBER’s north-south runway would be extended 2,500 feet by the project. A date to start construction has not yet been set.

With state ferries completion, Vigor’s ship work in Ketchikan slows: Vigor Alaska will trim its workforce at the company’s Ketchikan shipyard with work winding down on a program to build two state ferries and new work slow to come in, the company said. Between 50 and 80 workers will be let go between October and the end of 2018. About 300 were employed by Vigor at the yard including 100 brought on to accelerate work on two state ferry vessels, the second of which is nearing completion. Vigor said some workers may be transferred to other Vigor shipyards in the Pacific Northwest. The company also has a project under way at Fort Greely, east of Fairbanks, where some workers could find work.

As Alaskans visit, Chinese hackers get to work: It was embarrassing for state officials but Chinese hackers probed the computer networks of state agencies and businesses at the same time that an Alaska trade delegation led by Gov. Bill Walker was in China. A U.S. computer security firm detected and reported the attempt. The attack originated from Tsinhua University, one of China’s elite institutions. The attempt may have been linked to current Alaska-China negotiations on a natural gas pipeline deal, said the U.S. security firm, Recorded Future.

PenAir sale pending? An attorney for the trustee in PenAir’s bankruptcy proceeding asked the court to schedule a sale of the regional carrier’s assets in September or October. PenAir is one the state’s major air carriers, serving mainly Southwest Alaska. Its bankruptcy filing, made about a year ago, stems from problems with a 2012 expansion into the Lower 48, not its Alaska operations. The asset sale would be essentially a sale of the airline. The minimum bid being asked is $5.5 million, which attorneys said is sufficient to pay off Wexford Capital, which made operating loans to PenAir during the bankruptcy. PenAir’s unsecured creditors, which total 20, are owed $9 million. The action is not expected to disrupt PenAir’s service to Southwest communities like Dillingham, King Salmon, Cold Bay and Sand Point.  

Marad ordered to turn over Anchorage port study: Litigation over the botched Port of Alaska (formerly Port of Anchorage) reconstruction is ongoing. The U.S. Maritime Administration, or MARAD, the federal agency in charge of the project, has been ordered by a judge to turn over a report on construction problems the agency commissioned with AECOM, an engineering company. The move is expected to speed efforts for  settlement. The city has already settled with contractors on the project for $19.5 million and is anticipating a larger settlement with MARAD. The settlements will help fund a revised reconstruction program the port now has underway.

Short of school buses, Bethel School hires taxis: The Lower Kuskokwim School District is hiring taxis to transport school children in Bethel until new school buses arrive in a few weeks. Kusko Cab, a taxi company, will pick up children on routes similar to those of the buses. A bus contractor, Golden Eagle Ltd., previously operated the school transportation system, but the school district was unable to reach a new agreement with the company this summer.

Project to remove unused Eklutna Dam is completed: A $7.5 million project to remove an unused 61-foot hydroelectric dam on the Eklutna River was completed in August, the first step in restoring the natural stream and runs of salmon. The Conservation Fund, a nonprofit, raised the funds for the project, which was done with the landowner, Eklutna Inc. and the Native Village of Eklutna, a tribal group. The project involved removal of the concrete dam as well as sediment that had accumulated,

Anchorage now has ban on plastic bags, state’s most restrictive: Anchorage’s assembly approved what will be the state’s most restrictive ban on disposable plastic shopping bags from retail stores. The measure takes effect March 1, 2019. Plastic bags for some uses, like produce and meat, are exempt. Retailers will also charge a fee for handing out paper bags. Restrictions in other Alaska communities allow retailers to offer thicker plastic bags, also for a fee. In Anchorage the restrictions will apply to restaurants, pharmacies and other retail outlets.

Despite tight market, new housing construction in Anchorage is down: Despite Anchorage’s tight housing market the number of new residential units being built this year is down sharply, real estate broker Connie Yoshimura wrote in the Alaska Journal of Commerce. From January through June only 26 single-family housing units were approved for construction by the Anchorage municipality, down from 52 for the same period of 2017. Multi-family development is down. So far no new apartment or townhouse-type units have been permitted compared to 153 last year for January-through-June. The average permit value for a single-family unit under construction is $407,371, Yoshimura wrote. That’s without land. Factoring in $140,000 for a lot brings a new-build single-family house cost to about $540,000.

Despite recession, Alaska home values are resilient: Alaska residential home sale prices are up this year and don’t appear to be affected by the recession, according to state data. The average so far in 2018 is $331,637, up from $313,146 in 2017 and $321,478 in 2016. There’s also no sign of an increase in home foreclosures. In fact, the number for 2018 appears to have dropped. That shows stability in the number of Alaskans who own homes. However, residential rental vacancy rates, mainly apartments, are up in 2018 but only modestly, at 7.9 percent compated with 7.3 percent in 2017. That shows some increasing movements among Alaskans who rent, who tend to be younger and mobile.

What’s behind stability amid recession? Most laid-off workers get jobs: One factor behind this stability is that most resident workers who lost jobs in oil and gas, construction and state government since 2015 are still employed, most in the same industry, according to a state labor analysis. Just over 60 percent of oil workers are still employed in petroleum; about 58 percent of construction works are still in that industry and over 70 percent of state workers who left jobs since 2015 are still employed in government. About 25 percent of laid-off oil workers are now employed in different industries; about 20 percent of construction workers are in different fields, and about 10 percent of state workers have switched to non-government employers. Only a minor percentage appear to have left the state – 10 percent for both petroleum and construction and five percent of former state workers. These counts are of residents (i.e. Permanent Fund Dividend recipients). Statewide about 30 percent of workers are nonresident.

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