After year of downturns across Anchorage economy, hope for change in 2021 remains

ANCHORAGE, Alaska (KTUU) - As the economy has struggled, many Anchorage residents and business owners have as well. However, while recent economic reports indicate a severe downturn in 2020, there remains hope that things could still change in 2021.

Alaskans have also demonstrated resilience, with continued efforts to survive amid an economic crisis, such as those seen in cities like Anchorage, where the local economy remained on the edge of a breaking point throughout the last year. Commercial travel, such as passenger flights and any movement via the nearby state ferry system, was at a near standstill; business owners have fought tooth and nail to keep their doors open, despite the closure of many across town; the majority of other industries, such as hospitality groups, non-profits, and the oil sector, have suffered since the start of the pandemic

One of the few highlights of Anchorage’s economy in 2020 was a stable federal workforce and high traffic in and out of Ted Stevens Anchorage International Airport. With about 50% of cargo previously carried in the bellies of passenger planes – and many of those planes grounded for part of 2020 – flight volume ballooned starting early in the year.

Things were certainly not as good as some economic forecasters projected. The Anchorage Economic Development Corporation recently noted that in an outlook for 2020, the hope was that four-year-long jobs slide in which about 6,000 positions were lost could end that same year, and that the economy would support some 150,000 jobs. Instead, the group said that “COVID-19 laid waste to the modest hope that the Anchorage economy would be stable (or even grow) in 2020.”

As for 2021, projections for this year could be even more difficult to pinpoint.

“These are predicated on a lot of variables, and this has been a tough year to make projections,” said AEDC’s Bill Popp. “Will we have a tourism season? Has the pandemic been brought under control? And a number of other things that are making it a little difficult to project.”

The group’s Business Consumer Index Report’s expectations for this year compared to last show more downward trends: reduces predictions for the overall composite index, as well as the Anchorage economy, gross sales, net profits, employment and capital expenditures indices.

”The degree of pessimism for 2021 registered in the composite index and for the Anchorage economy is striking,” according to the report, “suggesting some businesses foresee little or no recovery from the difficult year just passed. This year’s BCI survey also illustrates that the pandemic had widely divergent impacts on different businesses, ranging from increases in sales and profits to sharp declines.”

The group maintains that much of the potential, near-future success of the economy will rely in large part on containing the spread of COVID-19, maintaining low rates of infection and high rates of vaccinations, and an injection of federal relief funding into the community.

Still, despite the many jobs lost and much economic change, there remains much to be gained.

“We have about 18,000 jobs to get back to our peak from 2015,” Popp said. “We’ve got a long way to go. But we are looking forward to a year of recovering job growth.”

Read the 2021 AEDC Economic Forecast document by clicking here. The annual AEDC Business Confidence Index Report is available here.

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