Northern Economics Says Alaska Economy Will Enter Recession in 2016
SEAFOODNEWS.COM by John Sackton - February 9, 2016
At an Alaska World Trade Center luncheon last week Marcus Hartley, President of Northern Economics, said the state's economy would enter recession in 2016.
That generally means negative economic output, and a decline in the number of jobs.
Last year, their forecast called for an overall reduction of jobs in Alaska by 0.5%. Instead, the number of jobs increased by 0.4% with healthcare, wholesale/retail and transportation and misc services all having solid growth in the 4th quarter. Together, these sectors account for about 40% of all Alaskan employment.
But oil and gas, banking, and all levels of government employment fell sharply in the 4th quarter. Partly this is driven by the precipitous drop in oil revenues as the price of oil falls below $30. But it is also driven by the reductions in government jobs both at the state and federal level. According to Hartley, every $1.00 cut in staff expenditures leads to a reduction of $1.50 in economic activity.
2016 is the year that these cuts are likely to tip the state's economy into recession...
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