Migration from Anchorage to the Mat-Su region has picked up again after several years of decline. New data shows 1,700 people moved from Anchorage to Mat-Su in 2022, said Bill Popp, CEO of Anchorage Economic Development Corp. AEDC presented its annual economic forecast presentation at the Dena’ina Center in Anchorage.
What prompts the renewal of migration is likely Anchorage’s record-high housing costs and a continued scarcity of quality housing, Popp said.
For many years Mat-Su was the go-to place for Alaskans seeking lower housing costs and more living space, which caused the valley population to increase sharply. The trend slowed during the four-year Alaska recession, caused by the 2016 oil price collapse and, more recently, the COVID-19 pandemic.
Now more people are moving north out of Anchorage again. It may be a temporary blip, Popp said, but the tight local housing market shows no signs of abating and though home prices are expected to soften due to high interest rate this hasn’t happened yet.
Overall, Anchorage is slowly losing population and that is mainly due to demographics, an aging population and a steady loss of working-age people leaving the state. Since working-age people are often in families with children, the overall effect is a loss in population that is somewhat offset by new births.
Anchorage and Mat-Su are interconnected and essentially one economy, and what happens in Anchorage is eventually felt in the valley although the migration from Anchorage may delay this.
Popp said the loss of working-age adults out of state is the direct cause of labor shortages that are now affecting businesses and industries across the state, including in Mat-Su. The underlying economy is recovering from the pandemic and oil price recessions, he said, but the inability of employers to recruit all the workers they need has become a serious drag on the recovery, Popp said.
Data from employer jobs postings reinforces this, he said. In 2022 there were 7,400 postings advertising new positions in the Anchorage area, up from 6,300 postings in 2019, the year before the pandemic, he said.
Overall, the outlook for Southcentral Alaska is optimistic, but with modest job growth expectations due mainly to scarcity of workers. On a macro-economic level, inflation is expected to continue to moderate following the national trend. While there are concerns for a national receession that could affect Alaska, most expect it to be mild if it happens, Popp said.
Anchorage, meanwhile, is expected to gain 1,550 jobs in 2023, but that is about half of the 3,500 jobs gained in 2022, Popp said. Job growth could be substantially higher this year if there were people to fill jobs. The good news, however, is that no sector is expected to lose jobs this year, Popp said.
Several industries will be essentially flat including the financial sector and government. Oil and gas and professional and business services, a field that includes engineering, will show modest growth.
Leisure and hospitality, which includes restaurant and hotel workers serving the visitor industry, is expected to grow in 2023 as it did in 2022 with recovery in tourism, Popp said. New growth in cruise ship passengers is expected in 2023.