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Slight uptick for O&G jobs this year
Department of Labor’s ‘Trends’ forecast projects 0.4% jobs increase overall statewide, driven by growth in military, oil, tourism
Kristen Nelson Petroleum News
The Alaska Department of Labor and Workforce Development has its jobs forecast out for 2019, and that forecast is just slightly positive, coming off three years of statewide job declines, starting in 2016 and running through last year.
In the January issue of “Alaska Economic Trends” economist Karinne Wiebold summarized the statewide forecast, noting three drivers of growth for the year, starting with the military, with work underway for the arrival of F-35 fighter jets at Eielson beginning in 2020. A half-billion dollars of work is expected for the jets and additional military and civilian support staff, with the Air Force base set to host two full squadrons of F-35 jets by 2022. New oil and gas projects will also add to jobs growth in the year, as will tourism, with 2019 expected to be another record year for visitors, Wiebold said in the statewide summary.
Construction is projected to grow the most, adding 900 jobs in 2019, 5.8 percent, with those jobs mostly related to the work at Eielson, but also including work in Southcentral following the 7.0 magnitude earthquake Nov. 30.
Oil and gas industry jobs dropped 37 percent from a peak in 2014, down 5,500 jobs, with the bottom appearing to occur last year. Statewide the oil and gas industry is expected to add 300 jobs this year.
The hardest hit industries, from 2015-18 were oil and gas; construction; and professional and business services. All are expected to begin to recover this year, Wiebold said.
Overall jobs are expected to increase statewide by 1,400, a monthly average of 328,200 this year, up from 326,800 in 2018 and 329,000 in 2017.
Anchorage Economist Neal Fried said modest job growth was expected in Anchorage, after three years of job losses, “the longest recession in the city’s history.” The gain this year is only expected to be 0.2 percent, coming from small gains in a number of industries.
The oil industry, headquartered in Anchorage, lost 6,100 jobs statewide between December 2014 and November 2017, with employment mostly stable since then, he said, and a small gain in jobs is expected this year, based on better oil prices, recent discoveries and improved access to resources.
Fried noted ConocoPhillips plans to drill six to eight new wells in 2019 and has an increase in their budget from $900 million last year to $1.2 billion this year.
Independents also have bigger plans for 2019, he said. “This means the industry is hiring again after three years of cuts, which bodes well for Anchorage employment.”
Construction was also hard hit, losing 1,100 jobs between 2015 and 2017, with modest gains in 2018 which are expected to continue in 2019, Fried said. This year’s gain in construction isn’t due to big projects “but because activity had fallen to such a low level,” only getting back to the 2001 level of some 7,400 jobs, steeply down from 9,800 in 2005.
Another job category, professional services, will see losses taper, Fried said, with the recession having “taken a big bite out of architectural, engineering, environmental, and other consulting services through a multiyear slowdown in construction and oil and mining exploration.” The category of which these services are a part, professional and business services, began to lose jobs in 2014 and continued declining through last year, with a total loss of 3,300 jobs to date. The 2019 loss is forecast to be smaller, he said, “because the improved outlook for construction and oil will increase demand for related services.”
Overall, Anchorage jobs are forecast to increase by 300 this year, for a monthly average of 151,100, up from 150,800 last year. Oil and gas jobs are forecast to average 2,700 per month this year, up from 2,500 in 2018.
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