Kenai Peninsula economic outlook: Job growth slows a little, still steady

While job growth has risen steadily in the past few years, a state economist predicts a slight decrease in job growth for the Kenai Peninsula in 2014.

Alyssa Shanks, economist for the Alaska Department of Labor, presented her projections at a Kenai Chamber of Commerce luncheon on Jan. 15. Compared to 2013, in which job growth rose nearly 5 percent, she estimated a conservative 2 percent this year.

Shanks said she doesn’t like to overestimate with big expectations.

“I tend to be more conservative in my forecast,” she said. “I would hate to puff someone up and let them down.”

Overall job growth has trended up the past three years, from 1.7 percent in 2011, to three percent in 2012, she said. Despite the predicted decrease for 2014, it is still a better rate than the rest of the state. Statewide job growth is projected to be 0.4 percent, down from 0.5 in 2013.

The increase in oil and gas activity in Cook Inlet in the last few years has shown up in the numbers, Shanks said. While oil and gas jobs lead the way, health care is the fastest growing occupation, she said.

“Oil remains a big piece of the pie,” she said. “But health care’s slice keeps getting bigger.”

Construction, local government and tourism round out the top five work forces on the peninsula, she said. Kenai Peninsula residents earn an average of $43,258 annually, ranked eighth among boroughs and below the state average, she said.

Shanks said the leisure and hospitality industry continues to play a large role in the Kenai Peninsula economy.

“The Kenai Peninsula has been dubbed Alaska’s playground and that reputation has rung true,” she said. “The attraction of the Kenai River alone brings a lot of money in.”

While the summer tourism season brings in droves of people from Anchorage, the numbers show population growth on the peninsula is larger than Anchorage and the Mat-Su Valley. Shanks said the population growth in the Kenai Peninsula from 2010-2013 was 1.07 percent. This year the projection increases to 2.34 percent.

One factor to the population growth may be that the Kenai Peninsula Borough has the most affordable home prices in the state with an average price $239,469, Shanks said.

With health care jobs growing, reasonable home prices and plenty of tourist attractions, the numbers suggest the peninsula has become one of the largest growing retirement communities in the state, she said.

“It has been thought of as a draw for retirees, and to some degree we see that in the data,” she said. “The peninsula tends to have a larger older population than other places in the state.”

The borough’s tax structure for seniors also may play a factor. An ordinance that would have put a cap on property tax exemptions for residents 65 and older was voted down in January by the borough assembly.

The unemployment rate in the Kenai Peninsula is trending downward just under 8 percent, but that is higher than the state average of 6.5 percent, according to state figures.

Shanks said one of the most interesting facts about the peninsula’s economy is where it comes from. The 20,258 people that live and work in the Kenai Peninsula Borough bring in $279.4 million net gain.

A lot of people live here, but work in other parts of the state, she said.

Of those who live, but don’t work here, 1,900 people work in the North Slope, while another 1,738 work in the Anchorage area.

“For several years, the Kenai has brought in more income than it has let out,” she said. “The people who leave the Kenai to go and work somewhere else make more money and bring more money back, than people who take their wages here and go home with them.”

One of the largest employers is the Kenai Peninsula Borough School District with 839 teachers. Retail is made up of 783 people, engineers 424 and construction accounts for 400 jobs. Shanks said the fastest growing occupations for people with a bachelor’s degree or higher are in the health care and education sectors.

Shanks said the fishing industry is a difficult one to analyze because the commercial side is in one bracket while sports fishermen fall into tourism. She said there is a ton of data the state would like to have, it is just a matter of knowing where to obtain it.

“That would be a fascinating project,” she said.

Dan Balmer is a reporter for the Peninsula Clarion. He can be reached at daniel.balmer@peninsulaclarion.com.

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