Economic Projections: Alaska and the Southern Railbelt, 2000-2025

Abstract

In the 30 years between statehood and 1990, Alaska was dominated by petroleum-driven growth punctuated by a number of boom and bust cycles, each of which has brought the economy to a higher plateau of activity (Figure 1.) Since 1990 the Alaska economy has moved into a period of slower growth because petroleum production—the source of half of state value added—is now in decline. Continued exploitation of petroleum resources, even as production declines, as well as growth in other basic industries such as tourism and mining, will help to offset this loss and stabilize the economy. But dependence on commodity-producing industries means that cycles in the petroleum, fishing, timber, and mining sectors will continue to generate business cycles at the state and regional levels. The large federal and state government presence in the economy means that political decisions made in Washington and Juneau will continue to exert a strong influence on the economy.