Alaska Employment Down 1.6 Percent in First Half of 2016 - P.O.W. Report

Tuesday, December 6, 2016

Alaska Employment Down 1.6 Percent in First Half of 2016

JUNEAU, Alaska—Detailed data released today for the first half of 2016 show that job loss in Alaska has spread to most sectors of the economy. Average monthly employment in the first six months of 2016 was down 5,530 jobs, or 1.6 percent, compared to the first half of 2015. Employment losses accelerated from a 1.2 percent decline in January to a 2.5 percent decline in June.

Employers paid $8.6 billion in wages during the first six months of 2016, down from $9.1 billion during the first half of 2015, a 4.5 percent decline when adjusted for inflation.

Private sector employment was down 4,867 jobs, or 1.9 percent, driven largely by losses in oil and construction. Oil and gas industry employment was down 2,384 jobs, which was an average monthly loss of 16.4 percent. Oil industry cutbacks escalated through the first half of the year, from 11.9 percent fewer jobs in January to 22.1 percent fewer in June.

Construction employment was down an average of 8.3 percent in the first half of the year, with steady losses each month. Specialty trade contractors and heavy and civil engineering construction were hit hardest, impacted by minimal capital budgets and cutbacks in oil-related construction projects.

Losses in the professional and business services sector, 1,536 jobs, were closely tied to oil and construction declines. Nearly half the losses were in architectural, engineering and technical consulting services. Managing offices and temporary help services also lost jobs.

Manufacturing employment, which is dominated by seafood processing in Alaska, was lower than 2015 levels by a small amount in early 2016 but May and June showed large over-the-year losses from weak salmon returns.

Wholesale and retail trade began recording losses in the first half of 2016, with a combined average monthly employment loss of 178 jobs. Losses accelerated from January, when both sectors were adding jobs, to June, where combined employment was down by 906 jobs. Trade establishments associated with construction and heavy machinery were generally down and so was sporting goods store employment, a result of store closures.

The transportation and warehousing sector showed growth in the first half of 2016, largely in air cargo transportation and tourism-related transportation. Other freight transportation was down slightly in response to the downturn in local consumption.

The information industry remained relatively flat from the first half of 2015 through the first half of 2016. Telecommunications, its largest component, did not add jobs in 2016. Gains in the motion picture industry offset small losses in print publications. The financial services industry — which includes financial institutions, insurance carriers and real estate and rental companies — lost 77 jobs, mostly in real estate.

Education and health services — which includes private education, social services and health care — was the only sector to gain a significant number of jobs, growing by 2.3 percent overall. Ambulatory health service employers, which have the most jobs in the sector, grew by 2.2 percent, or 400 jobs over the year. Private hospitals, the second largest health care employer, grew by 3.3 percent, or 370 jobs. Nursing and residential care facilities added 56 jobs, and social assistance added 246, for 2.6 percent growth. Private education, which makes up just 5 percent of the sector, was flat in the first half of 2016.

The leisure and hospitality industry, which depends on local as well as visitor expenditures, was relatively flat at 0.2 percent growth, or 69 additional jobs. Nearly two-thirds of jobs in this industry are in restaurants and bars, which were down slightly. Accommodations also lost a small number of jobs, which were offset by a 3.6 percent gain in the smaller arts, entertainment and recreation sector, at 164 jobs. Most of this growth was in fitness and recreational sports centers.

The remainder of private sector employers are categorized as other services, which lost jobs in the first half of 2016. Most of the loss in this group was in the personal and laundry services sector.

The public sector, which made up a fourth of payroll employment, was down 0.8 percent, or 663 jobs. The decline was driven by a 4.6 percent loss in state government, or 1,199 jobs. Local government employment was up 0.4 percent, or 183 jobs, almost all in school districts. Federal growth also offset some of the losses from state government. Federal civilian employment grew 2.4 percent, or 353 jobs, as federal employment continued to rebound from years of cuts.

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