Graphic provided by the Alaska Department of Labor and Workforce Development. The average West Coast spot price per barrel of Alaska North Slope crude oil. - Photo provided

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More job losses anticipated for state, region

January 19th | Shady Grove Oliver Print this article   Email this article  

By Shady Grove Oliver

The Arctic Sounder

The state is bracing itself for a third year of job losses.

While the downward trend is continuing again in 2018, the losses predicted for this year are not expected to be as great as those sustained in 2016 or 2017, according to the annual employment forecast from the Alaska Department of Labor and Workforce Development.

The oil and gas industry is once again anticipated to field some of the deepest cuts, with an additional 500 jobs expected to be lost this year.

"Although the industry is still losing jobs, the pace is nowhere near what it was in 2016," wrote statewide report author Karinne Wiebold. "This forecasted loss, representing 5.1 percent of the industry's overall employment, would be a third of what it lost in 2017."

Last year, the loss represented about 13.3 percent of the total workforce, or about 1,500 jobs. However, some of the most drastic cuts came two years ago, when industry lost a total of about 2,900 jobs.

"The oil and gas industry was able to maintain record high employment levels through most of 2015, but the losses that came in 2016 were swift and deep," Wiebold wrote.

The statewide recession, which followed a drastic drop in oil prices in 2014, has hit various sectors in waves, with the first areas hit being, naturally, the oil and gas industry and state government.

Prudhoe Bay saw high employment in early 2015, before the full effect of the price drop hit, with 13,845 jobs. However, by last fall, the area had lost about 4,600 jobs and hit its lowest employment levels in a decade, according to the Anchorage area report.

"Nationally, oil industry employment began to recover in late 2016," wrote area author Neal Fried. "Another favorable development is oil prices, which have inched up past the $60 mark, which will help stabilize the industry. More exploration and maintenance are on the horizon for the North Slope this year, and oil production has increased for two years in a row and is forecasted to increase again in 2018."

Fried pointed out that recent discoveries by Caelus Energy Alaska and Armstrong Oil and Gas Company could help boost employment in that sector in the long run, should they pan out.

Secondary losses have been seen since in construction and professional services, the report noted, which are highly dependent on both government and industry to stay afloat.

"When the oil and gas industry cut projects, construction employment began to fall," Wiebold wrote. "Similarly, when the state capital budget dropped, the construction industry absorbed much of the blow. Projects that were already funded continued, but the last couple of capital budgets have been bare bones, which has meant less construction work."

That area is predicted to lose about 500 jobs this year, as well.

"While losses are tapering, that's partly because the bulk of the losses have already happened," Wiebold wrote.

The construction sector lost nearly 3,000 jobs total over the last two years, after losing just 200 in 2015.

The northernmost part of the state, including the North Slope, Northwest Arctic and Bering Straits region, once again saw the highest percentage of jobs lost overall in Alaska, measured from November 2016 to November 2017. During that period, the region saw a 4.1 percent drop in employment.

Looking at regional numbers, which have not been seasonally adjusted, the Nome Census Area saw its unemployment rate rise slightly from 11.7 percent to 11.9 percent.

The North Slope borough jumped a bit more from 6.5 percent to 6.9 percent.

The Northwest Arctic maintained its position as having the greatest unemployment in the region, rising from 15.2 percent to 15.5 percent. As a whole, the region's unemployment went up from 10.6 percent to 11.1 percent from late 2016 to late 2017.

While job losses and economic hardships from the recession are expected to continue throughout the state and region this year, they are not expected to be as great as they have been over the last two years.

 

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