Statewide Economic Review and 2006 Forecast by Pat Burden ...
Statewide Economic Review and 2006 Forecast by Pat Burden ...
Statewide Economic Review and 2006 Forecast by Pat Burden ...
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Alaska <strong>Economic</strong> Outlook<br />
<strong>2006</strong><br />
Presentation to<br />
World Trade Center Alaska<br />
<strong>Pat</strong>rick <strong>Burden</strong><br />
January <strong>2006</strong><br />
northerneconomics
Our Outlook Measures<br />
northern e conomics<br />
• Gross State Product (GSP)<br />
• Measure of economic activity; similar to GDP<br />
• Includes all goods <strong>and</strong> services produced in the state<br />
• Number of jobs<br />
• Includes military <strong>and</strong> self-employed residing in Alaska<br />
• Earnings<br />
• Includes wages <strong>and</strong> salaries, proprietor’s income, <strong>and</strong><br />
contributions to pensions <strong>and</strong> social security
<strong>Forecast</strong>ing Methods<br />
northern e conomics
Sacrificing a Sheep<br />
northern e conomics
Rolling the Dice<br />
northern e conomics
Consulting the Experts<br />
northern e conomics
Jobs By Sector<br />
northern e conomics<br />
450<br />
Thous<strong>and</strong>s of Jobs<br />
400<br />
350<br />
300<br />
250<br />
200<br />
150<br />
100<br />
50<br />
0<br />
2001 2002 2003 2004 2005 <strong>2006</strong><br />
Year<br />
Government<br />
Hospitality <strong>and</strong> leisure<br />
Health <strong>and</strong> Education<br />
Finance <strong>and</strong> Other Services<br />
Trade<br />
Construction <strong>and</strong><br />
Manufacturing<br />
Transportation <strong>and</strong> Utilities<br />
Natural Resources
GSP <strong>by</strong> Sector<br />
northern e conomics<br />
45<br />
Billions of $<br />
40<br />
35<br />
30<br />
25<br />
20<br />
15<br />
10<br />
5<br />
Government<br />
Hospitality <strong>and</strong> leisure<br />
Health <strong>and</strong> Education<br />
Finance <strong>and</strong> Other Services<br />
Trade<br />
Construction <strong>and</strong><br />
Manufacturing<br />
Transportation <strong>and</strong> Utilities<br />
Natural Resources<br />
0<br />
2001 2002 2003 2004 2005 <strong>2006</strong><br />
Year
Earnings <strong>by</strong> Sector<br />
northern e conomics<br />
25<br />
Billions of $<br />
20<br />
15<br />
10<br />
5<br />
Government<br />
Hospitality <strong>and</strong> leisure<br />
Health <strong>and</strong> Education<br />
Finance <strong>and</strong> Other Services<br />
Trade<br />
Construction <strong>and</strong><br />
Manufacturing<br />
Transportation <strong>and</strong> Utilities<br />
Natural Resources<br />
0<br />
2001 2002 2003 2004 2005 <strong>2006</strong><br />
Year
2005 Jobs <strong>by</strong> Sector<br />
northern e conomics<br />
23%<br />
5%<br />
6%<br />
9%<br />
10%<br />
12%<br />
11%<br />
24%<br />
Natural Resources<br />
Construction <strong>and</strong> Manufacturing<br />
Finance <strong>and</strong> Other Services<br />
Hospitality <strong>and</strong> leisure<br />
Transportation <strong>and</strong> Utilities<br />
Trade<br />
Health <strong>and</strong> Education<br />
Government
2005 GSP <strong>by</strong> Sector<br />
northern e conomics<br />
6%<br />
3%<br />
18%<br />
27%<br />
10%<br />
22%<br />
7%<br />
7%<br />
Natural Resources<br />
Construction <strong>and</strong> Manufacturing<br />
Finance <strong>and</strong> Other Services<br />
Hospitality <strong>and</strong> leisure<br />
Transportation <strong>and</strong> Utilities<br />
Trade<br />
Health <strong>and</strong> Education<br />
Government
2005 Earnings <strong>by</strong> Sector<br />
northern e conomics<br />
31%<br />
7%<br />
8%<br />
12%<br />
4%<br />
10%<br />
19%<br />
9%<br />
Natural Resources<br />
Construction <strong>and</strong> Manufacturing<br />
Finance <strong>and</strong> Other Services<br />
Hospitality <strong>and</strong> leisure<br />
Transportation <strong>and</strong> Utilities<br />
Trade<br />
Health <strong>and</strong> Education<br />
Government
<strong>Economic</strong> Drivers for <strong>2006</strong><br />
northern e conomics<br />
• Continued dem<strong>and</strong> <strong>and</strong> higher pricing for natural<br />
resources<br />
• Lower oil prices than at present but average prices<br />
will be higher for <strong>2006</strong><br />
• Spending of FY <strong>2006</strong> budget surplus<br />
• Continued decline in the U.S. dollar<br />
• Iraq War <strong>and</strong> reduced federal dollars for certain<br />
agencies<br />
• Continued growth in U.S. economy<br />
• Higher short-term interest rates<br />
• Growth in number of military personnel
Natural Resources<br />
northern e conomics<br />
Billions of $<br />
14<br />
12<br />
10<br />
8<br />
6<br />
4<br />
2<br />
0<br />
100<br />
80<br />
60<br />
40<br />
20<br />
-<br />
Thous<strong>and</strong>s of Jobs<br />
2001 2002 2003 2004 2005 <strong>2006</strong><br />
Year
Transportation & Utilities<br />
northern e conomics<br />
Billions of $<br />
14<br />
12<br />
10<br />
8<br />
6<br />
4<br />
2<br />
0<br />
2001 2002 2003 2004 2005 <strong>2006</strong><br />
Year<br />
100<br />
80<br />
60<br />
40<br />
20<br />
0<br />
Thous<strong>and</strong>s of Jobs
Construction & Manufacturing<br />
northern e conomics<br />
Billions of $<br />
14<br />
12<br />
10<br />
8<br />
6<br />
4<br />
2<br />
0<br />
2001 2002 2003 2004 2005 <strong>2006</strong><br />
Year<br />
100<br />
80<br />
60<br />
40<br />
20<br />
0<br />
Thous<strong>and</strong>s of Jobs
Trade<br />
northern e conomics<br />
Billions of $<br />
14<br />
12<br />
10<br />
8<br />
6<br />
4<br />
2<br />
0<br />
2001 2002 2003 2004 2005 <strong>2006</strong><br />
Year<br />
100<br />
80<br />
60<br />
40<br />
20<br />
0<br />
Thous<strong>and</strong>s of Jobs
Services<br />
northern e conomics<br />
Billions of $<br />
14<br />
12<br />
10<br />
8<br />
6<br />
4<br />
2<br />
0<br />
2001 2002 2003 2004 2005 <strong>2006</strong><br />
Year<br />
110<br />
105<br />
100<br />
95<br />
90<br />
85<br />
80<br />
Thous<strong>and</strong>s of Jobs
Health & Education<br />
northern e conomics<br />
Billions of $<br />
14<br />
12<br />
10<br />
8<br />
6<br />
4<br />
2<br />
0<br />
2001 2002 2003 2004 2005 <strong>2006</strong><br />
Year<br />
110<br />
90<br />
70<br />
50<br />
30<br />
10<br />
-10<br />
Thous<strong>and</strong>s of Jobs
Hospitality & Leisure<br />
northern e conomics<br />
Billions of $<br />
14<br />
12<br />
10<br />
8<br />
6<br />
4<br />
2<br />
0<br />
2001 2002 2003 2004 2005 <strong>2006</strong><br />
Year<br />
100<br />
80<br />
60<br />
40<br />
20<br />
0<br />
Thous<strong>and</strong>s of Jobs
Government<br />
northern e conomics<br />
Billions of $<br />
14<br />
12<br />
10<br />
8<br />
6<br />
4<br />
2<br />
0<br />
2001 2002 2003 2004 2005 <strong>2006</strong><br />
Year<br />
100<br />
80<br />
60<br />
40<br />
20<br />
0<br />
Thous<strong>and</strong>s of Jobs
Government – Federal Funds<br />
northern e conomics<br />
10<br />
Billions of $<br />
8<br />
6<br />
4<br />
2<br />
0<br />
2000 2001 2002 2003 2004<br />
Federal Fiscal Year
Other Trends: Changing Workforce<br />
Composition<br />
100<br />
80<br />
northern e conomics<br />
Percent<br />
60<br />
40<br />
20<br />
0<br />
2001 2002 2003 2004 2005<br />
Year<br />
Alaska<br />
U.S.
Earnings as % of GDP/GSP<br />
northern e conomics<br />
Percent<br />
70<br />
60<br />
50<br />
40<br />
30<br />
20<br />
10<br />
0<br />
2001 2002 2003 2004 2005<br />
Year<br />
Alaska<br />
U.S.
Effect of Oil Prices<br />
northern e conomics<br />
• Outlook is $54/Barrel<br />
• $41.8 billion in GSP<br />
• 448,000 jobs<br />
• If oil is ±$5/Barrel<br />
• ±$2.3 to $2.4 billion in GSP<br />
• ±7,000 jobs
When the model doesn’t work…<br />
northern e conomics
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