Economists: Statewide recession inevitable, but don’t panic

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A statewide recession will inevitably happen this year, say two economics experts from Anchorage. But don’t panic.

Mike Fisher, a senior consultant of Northern Economics, told the Juneau Chamber of Commerce on Thursday that the state has enough cash reserves to keep the economy stable through a recession.

“We don’t need to panic because we have some resources to tie us through and we’re all aware and we’re starting to act,” Fisher says.

Fisher says he predicts a net loss of 2,000 jobs across the state by mid-2016. The natural resources industry is projected to lose about 800 jobs — while the hospitality industry is expected to expand with about 350 jobs.

Fisher says the state is better equipped to endure a recession compared to the economic downturn experienced in the 1980s.

“The benefit that we have now is that we have reserves. We have a lot more money and the impact so far is not looking like it will be as severe,” Fisher says. “We really learned a lot 30 years ago, and as a result we’re able to go into this a little bit better informed and with better thoughts about how to make it through.”

Executive Director Greg Wolf of the World Trade Center Alaska says he’s optimistic about the economy because of the state’s strong trade relationship with China. He says getting China to invest more in state projects is key to strengthening that relationship.

Wolf says Alaska’s exports have doubled in the last 20 years, and the state traded $4.6 billion worth of goods in 2013. He says Alaska’s goods have a high demand among consumers such as seafood, which contributes almost 50 percent of the state’s exports.

“What we’re selling are the building blocks of a stable economy,” Wolf says.

Wolf notes that developing Alaska’s untapped coal and copper resources could thwart the impending recession.

You can watch Gavel Alaska coverage of the economists’ presentation here.

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