Business Intelligence

Business Intelligence

Military, tourism lifts Fairbanks this year

Its jobs are still down from 2015 but Fairbanks is enjoying a mini-boom in home construction this year, lifting construction employment, with most of this in the North Pole community east of the Interior city. About 300 new residential housing units are needed for new Air Force personnel and families moving to Eielson Air Force Base with the two new F-35 squadrons arriving in 2019 and 2020. The Air Force said about 900 units are needed in total but when the normal Fairbanks area new construction and vacant existing capacity in the community are factored in, the new units needed drops to about 300, community officials say. Vacancy in older housing units are not included in the survey.

Meanwhile, construction at Eielson for new interceptor support facilities is underway, with $565 million budgeted. The work is boosting local employment in construction and engineering services. Fairbanks construction jobs are up 7.7 percent this year, state labor economists say.

Tourism boosts Fairbanks; leisure and hospitality employment up 12 percent this year.

Tourism is boosting Fairbanks. Leisure and hospitality employment, about half of which is restaurant and hotel workers, is up 12 percent this year. Winter tourism is increasing too. First quarter 2018 hotel/motel “bed tax” collections totaled $10.1 million with first quarter 2017 bed tax collections totaling $11.7 million. That reflects a sustainability in the trend. First quarter collections were $8.96 million in 2016 and $7.89 million in 2015.

Wages paid in Alaska rose 1.6 percent in the first half of 2018

Total wages paid in Alaska rose 1.6 percent in the first half of 2018, according to the state Department of Labor and Workforce Development. This occurred despite a small loss of jobs, of 0.6 percent, for the period. The apparent contradiction is explained by the mix of jobs, with more higher-paying jobs included in the overall mix. Health care, a relatively well-paid field, showed strong growth. In oil and gas jobs were down 8 percent but total income in the occupation was up 4.7 percent. Bonuses and incentive pay, which typically happens in the final quarter of the year, explain part of the income growth, state economists said. The state has lost 10,000 jobs since the recession started three and a half years ago.

Marijuana tax revenue continues to climb; funds earmarked for drug treatment

Marijuana continues to be a growth industry. State tax collections from marijuana sales reached $1.37 million in July, $110,000 up from June. Half of the state’s marijuana revenue collection is earmarked to support prisoner recidivism programs. Beginning in October one quarter of collections will support a new state marijuana education fund.

Arguments in cruise industry lawsuit in Juneau

A federal judge heard arguments Sept. 18 in the cruise industry’s lawsuit against the City and Borough of Juneau over how Juneau is spending money collected through a state cruise passenger tax. The industry argues that the funds should have been spent on projects benefiting cruise passengers under interstate commerce provisions of the U.S. constitution. The projects underway by the city do not directly benefit cruise visitors, it was argued. The city contends the projects do provide benefits.

University requests $24.5 million increase for next year’s budget

University of Alaska regents will propose a $351.5 million operating budget to the governor and Legislature for next year, Fiscal Year 2020. This would be a $24.5 million increase from the current year. Separately, the regents requested a $50 million capital budget for deferred maintenance on university buildings (the university’s deferred maintenance backlog totals about $1 billion) and another $5 million for the USArray Program, a system of seismic monitors that would detect ground movements. Legislators appropriated $327 million for the university’s current-year budget, a $10 million increase over last year. Regents met in Juneau in a two-day budget retreat in early September.

Anchorage teachers at contract impasse with district

The Anchorage School District and the teachers’ union declared an impasse in contract negotiations and have asked a federal mediator to step in. There are disagreements over salary and benefits and teachers are also asking for more autonomy in the classroom. The union’s contract proposal would add $54 million over three years in costs for the district, school officials said.

State issues air violation notices to cruise ships

The state Department of Environmental Conservation filed nine notices of violation of air quality regulations to cruise lines this year, the highest number since 2014. Holland America was cited for four violations on ships; Princess Cruises for two; Royal Caribbean for two and Norwegian Cruise Line for one. Fines could be as high as $40,000 per violation but the state will take in account steps taken to decrease emissions or a past record of compliance with regulations. Most violations occurred in Ketchikan, but that is where DEC’s compliance staff are located.

Well-known businessman, financial advisor Robert Gillam dies

Robert Gillam, founder of Alaska-based McKinley Capital Management and a well-known foe of the Pebble mine, died unexpectedly of a stroke. He was 72. Gilliam was reported to be one of Alaska’s wealthiest individuals. Gillam’s firm grew and prospered, proving that a major financial management firm could be successful in Alaska.

Niche retailers in Anchorage do well; Moose’s Tooth owners expanding

Niche retailers in Anchorage are doing well.The owners of Anchorage’s highly-successful Moose’s Tooth Pub and Pizzeria will open a new establishment at the former La Mex restaurant on Spenard Road in Anchorage. The new project will be a “food hall” with about 10 local food vendors providing service. Food halls are fast gaining in popularity in the Lower 48. Moose’s Tooth also opened the Bear’s Tooth Restaurant and theater in Spenard, and the company also owns the popular Alaska Rock Gym. A common theme in all of the enterprises is an appeal to a young demographic set with disposable income.

North Slope oil work pays over 25% of Mat-Su payroll

Most Alaskans think North Slope oil work is important to residents of Fairbanks, Anchorage and the Kenai Peninsula, but it’s also important to the Matanuska-Susitna Borough. The most recent state labor data, for 2016, shows 2,871 Mat-Su residents employed on the slope with about $281 million in wages earned. Interestingly, while slope workers constituted only 7 percent of Mat-Su’s employment in 2016 the wages amounted to over 25 percent of the total $1 billion estimated to be earned in 2016 by Mat-Su residents. 2016 is the most recent year the residency data can be compiled because labor economists match employer reports against Permanent Fund Dividend applications to verify residency, and there is a two-year lag in doing that. Mat-Su slope employment dropped from 3,588 in 2014, but that reflects the effect of the oil-price drop in 2015 and cutbacks by companies and contractors.

Alyeska Pipeline will trim 10 percent of its workforce in reorganization

Alyeska Pipeline Service Co. said it will trim about 10 percent of its workforce in a reorganization. The move is aimed at simplifying maintenance and will not affect the quality of support work for the 800-mile Trans Alaska Pipeline System. About 130 jobs will be eliminated. The split of layoffs between field workers and headquarters staff, mainly in Anchorage, is not yet known but Alyeska said the move is aimed at giving more authority to workers in the field.

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