Although most of the Kenai Peninsula’s demographic metrics stayed level in 2016 — population grew slightly and schools performed well — overall business activity fell about 10 percent and employment fell about 3.2 percent.
The Kenai Peninsula Economic Development District’s 2017 Situations and Prospects report, released Tuesday, noted that personal and per capita income increased, but gross business sales dropped about 10 percent between 2015 and 2016, from almost $3.7 billion in 2015 to approximately $3.3 billion in 2016.
“Declines in business activity were led by two high-wage sectors: oil and gas and construction, as well as by a decline in wholesale trade,” the report states.
Overall employment is also down about 3.2 percent in the last year, much of it in the oil and gas and related industries. Over the past 5 years, the mining, quarrying and oil and gas extraction sector has lost about 235 jobs. Manufacturing lost about 172 jobs, according to KPEDD’s third-quarter update to the Kenai Peninsula Borough Assembly on Tuesday.
“Employment declined 3.2 percent in our region but also the unemployment rate has dropped down to 8.4 (percent),” said Tim Dillon, the executive director of KPEDD, in his presentation. “A lot of that is because folks out there now aren’t even looking anymore. They’ve decided I’m really close to retirement, I’ve got money in the bank, I’m not going to look for a job.”
Unemployment in the Kenai Peninsula Borough is about 7 percent as of July 2017, according to the Alaska Department of Labor and Workforce Development. That’s about .5 percent lower than in June 2017 but slightly higher than in July 2016, when it was 6.8 percent, according to the Department of Labor and Workforce Development.
KPEDD, an economic development organization funded partly by the borough, partly by the U.S. Economic Development Administration and other fundraising, commissions the report through Juneau-based economic research firm Sheinberg Associates each year. Along with Situations and Prospects, the organization also released an update to its five-year Comprehensive Economic Development Strategy for the peninsula Tuesday and a set of city-specific data breakouts for the five biggest cities on the peninsula — Kenai, Soldotna, Seward, Homer and Seldovia.
Dillon said since KPEDD has started producing more regular data to the assembly, the city managers have asked for more specific data related to employment and economic trends within the individual cities. From now on, the city-specific numbers will be broken out, which city managers can use to discuss business ventures with potential new companies or other economic development endeavors.
“We hope that this is another document that can be used not only for the individual cities but also for the borough as a whole,” Dillon said. “…This is not a fluff piece, this is actual data points for people to make decisions.”
The Comprehensive Economic Development Strategy, which is designed to run from 2016–2021, includes a number of specific goals for the peninsula, such as expanding broadband internet infrastructure and seeking improved transportation framework. KPEDD is focused on updating the plan this year with a number of specific targets, including making a broadband map available to the public and assessing the impact of cuts to the Alaska Marine Highway System services, according to the 2017 update.
KPEDD is also working with a variety of different agencies on projects for the Kenai Peninsula, such as Alaska Communication’s broadband expansion project and businesses on grants and ventures, Dillon said, as well as keeping the community apprised of the economic situation on the peninsula.
“In the last year, we’ve done over 50 different presentations on the Kenai Peninsula,” he said. “We’re keeping people aware of what’s going on.”
Reach Elizabeth Earl at firstname.lastname@example.org.