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Providing coverage of Alaska and northern Canada's oil and gas industry
November 2022

Vol. 27, No.48 Week of November 27, 2022

Alaska jobs: oil industry recovery continues to lag rest of economy

Kristen Nelson

Petroleum News

Alaska employment peaked in 2015 and between 2015 and 2021 the state “shed 8% of its annual average employment, compared to a gain of 3% nationally,” said a University of Alaska Center for Economic Development report which compares Alaska’s economic performance to that of other states.

Looking at four factors - employment growth, unemployment, GDP growth and net migration - the report found Alaska at or near the bottom.

“The main culprit for Alaska’s lagging performance during these years was the low price of oil,” with a period of high prices coming to an end in 2014, “leading to falling employment in multiple sectors tied to the industry.”

The report said that compared to the rest of the U.S., Alaska’s recovery from the job drop due to COVID has been slower, with U.S. employment back to pre-pandemic levels over this past summer, while Alaska’s employment is still well below pre-pandemic levels.

The report said the U.S. overall saw steady employment expansion from 2010 to 2020, interrupted by the pandemic.

Alaska reached “its all-time employment peak in 2015 followed by five years of declining or stagnant employment.” From 2015 to 2021 “Alaska shed 8% of its annual average employment, compared to a gain of 3% nationally,” with only North Dakota showing a larger employment drop.

There was historically low unemployment in the U.S. prior to the pandemic. Alaska had the highest annual rate from 2017 to 2019, and while there were states with worse unemployment in 2020-21, “Alaska’s rates stayed above the national level,” with the second highest average unemployment from 2015 to 2021, averaging 6.5%. Not especially high for the state in historic terms and compared to 8.4% in Alaska during the 2008-10 “Great Recession,” the report said, and lower than the national rate at the time.

Gross domestic product for Alaska in 2021 was $57.3 billion, the smallest of any states except Wyoming and Vermont, also the only two states, the report said, with populations smaller than Alaska.

Inflation adjusted GDP for Alaska has declined from a 2012 peak, shrinking by 7.1% from 2015-21, the second largest decline, with only Wyoming, at 9.9%, having a larger decline - while U.S. GDP grow by 12.8%.

Alaska leads in net migration, which, the report said, is closely related to declining employment. While the U.S. gained an average of 2.2 residents per 1,000 each year from 2015-21, Alaska lost 8.8 residents per 1,000 over the period.

Department of Labor numbers

In its monthly jobs report for October the Alaska Department of Labor and Economic Development said the state’s job count was 2% above October 2021, a gain of 6,100 jobs, but still below 2019 levels by 10,800 compared to the October prior to the COVID pandemic.

“The oil and gas industry’s recovery continued to lag the rest of the economy,” the department said, gaining just 300 jobs from October 2021 but still 2,700 below October 2019. At an estimated 7,100 jobs for October, the oil and gas industry job count “was less than half that of October 2014, just before the one-two punch of the recession and then COVID.” The industry had some 9,800 jobs in October 2019.

- KRISTEN NELSON






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