Alaska’s industries can be group into 4 sectors: basic; infrastructure; support; and state and local government.
Oil and gas, fishing, logging, mining, and tourism are just some industries that generate income for Alaska. All these industries have gone through a long period of expansion and growth that brought a rapid number of jobs that helps stabilize Alaska’s economy.
Oil remains Alaska’s most important economic pillar. Alaska’s oil industry paid $180 billion in total revenue since 1959 and the industry accounted for more than 77,600 direct and indirect jobs in 2018. Despite the state’s longest recession between 2015 and 2018, the oil and gas industry had grown by 500 jobs (5.3%) in 2019 compared to the previous year, according to the Alaska Department of Labor and Workforce Development. Future trends predict that the petroleum industry continues to be a driver for the economy even with less production because of the many underdeveloped oil and gas fields on the North Slope. New drilling technology and un-tapping remaining reserves hold the potential to fuel the state’s economy for decades.
Although the state government promoted agricultural expansion in the 1970s, commercial farming is only concentrated in the Matanuska-Susitna valley. More than 1.2 million hectares of potentially tillable land exist in Alaska, but only a small portion of the state’s economy is agricultural. But as cheaper technology makes growing food easier, more Alaskans are turning to farming. It might be a bad thing for the rest of the world, but Alaska is warming twice as fast as the rest of the country, with winters some 6 degrees warmer than they were 60 years ago. The result? Apple trees and other plants that were once unable to survive in freezing arctic are now thriving in Alaska.
Alaska’s main export product after oil and natural gas is seafood. Seafood was the most valuable commodity in 1965. In 2013, offshore fisheries were able to accumulate a total of 5.8 billion pounds of seafood, which equates to an evaluation of $1.9 billion, all without pesky credit issues to derail production. Port of Kodiak is one of the largest fishing ports in the United States. However, the industry is now considered developed and with competition from other countries could significantly reduce the demand for stocks.
For logging, timber harvests and employment grew through the 1980s and exporting unprocessed timber remains to be the most profitable option for the industry although the limited availability of timber restricts the industry’s growth. Due to logging regulations, several pulp mills were closed, and Alaskan timber and forestry-related activities including efforts to establish an export forestry industry in the Tanana Valley have been unsuccessful.
Since 1880, minerals such as gold, copper, zinc, and silver have been mined in Alaska. With the development of Fort Knox mine, expansion of Red Dog Mine, and reopening of the Greens Creek mine, it is predicted that mining in Alaska will increase in the coming years.
Alaska has had an upsurge of tourism since the mid-20th century. Between May and September 2019, Alaska recorded an estimated 2.26 million visitors. With one in ten jobs are in the tourism industry, $2.2 billion tourist spend, and $1.4 billion in payroll created, the tourism industry remains the largest component of Alaska’s economy.
Infrastructure is the fundamental facilities, including the services necessary for the country’s economy to function. Infrastructure industries make money mainly by selling goods or services to other industries and consumers. These industries include construction, transportation, communications, public utilities, and business services.
At 663,000 square miles, Alaska is by far both the largest and least densely populated state. The extensive infrastructure development of Alaska fuel the state’s economic growth in the 80s. Cost of living in Anchorage and other urban areas has moved much closer to the U.S. average, largely thanks to more efficient transportation.
However, after the economic boom in the early 1980s, there has been a gradual decline in infrastructure employments. Jobs slumped when pipeline construction ended. Not surprising as this type of employment largely depends on government spending and the general health of the economy. The State of Alaska though has placed a priority on supporting projects by offering financing to private businesses that provide the greatest opportunity for natural resource development as it will create jobs as well.