Economic gloom for 2021
Last January 27, the Anchorage Economic Development Corporation (AEDC) presented the results of the thirteenth annual Business Confidence Index (BCI) Survey for Anchorage. And the results are very discouraging.
The purpose of this survey is to assess business conditions in the Anchorage area and gauge the confidence of its local businesses for the year 2021.
The report was presented by Bill Popp, CEO of AEDC, and the event was addressed via video by Alaska Governor Mike Dunleavy, Sen. Lisa Murkowski and Anchorage Mayor Austin Quinn-Davidson, among others.
The survey was conducted from November 19 to December 23, 2020. Online responses from 210 businesses and organizations in Anchorage, Chugiak, Eagle River and Girdwood were analyzed and modeled to produce business confidence indices. Key findings are highlighted below.
Business Confidence Indexes
With a maximum score of 100, an index above 50 indicates a generally optimistic outlook, while below 50 indicates a generally pessimistic view.
It is important to view this year’s BCI survey results recognizing that Anchorage’s economic outlook has been dramatically altered by the coronavirus pandemic.
Anchorage’s economic outlook in early 2021 is very different than it was in early 2020, with many new and varied factors to consider related to recovery from the Covid-19 pandemic.
The indices for 2021 show that optimism has dimmed and, in some cases, turned to gloom, with indices ranging from 43 to 53, all representing declines from 2020.
The largest decline was for net earnings, with an index drop of 10 points. The smallest decline was for Anchorage’s overall economy, where the decrease was 2.5 points.
The degree of pessimism for 2021 recorded in the composite index and for the Anchorage economy “is striking” the report says, suggesting that some businesses foresee little or no recovery from the difficult year just past.
This year’s BCI survey also illustrates that the pandemic has had widely divergent effects on different companies, ranging from increased sales and profits to a sharp decline.
The survey graphs, compared to the rates of every annual AEDC BCI survey conducted over the past ten years, indicate that the degree of widespread pessimism regarding Anchorage’s economy has never been higher since 2012. Pessimism only comparable to the three-year period 2016, 2017 and 2018.
Loss of employment and business profits
In terms of local employment, job prospects and hopes in Anchorage have never been so low since 2012.
When respondents were asked how Anchorage’s economy will fare in 2021 compared to 2020, more than half of businesses (52%) were pessimistic, saying they expect to do worse. Fewer businesses, 40%, expect the economy to do better.
The percentage expecting the economy to get worse is about the same as in 2020, while the percentage expecting the economy to get better has increased (40% in 2021 versus 30% in 2020).
These results are less optimistic than in 2020, when 67% of companies expected an increase and 20% a decrease.
The full report is available at https://aedcweb.com/wp-content/uploads/2021/01/AEDC-Anchorage-BIC-Report_Final.pdf.
What about ethnic minorities,especially Hispanics?
The event was attended by videoconference by this newspaper, Sol de medianoche, which repeatedly asked the organizers of the event the following questions in the chat:
1. How much money has been invested in helping Hispanic, Inuit and African American populations in economic need?
2. How much money has been spent in each of these communities?
3. What hope for social and economic advancement can the Hispanic community and other ethnic minorities in Anchorage have?
None of these questions have been answered, neither in the chat nor subsequently via email even though we were told they would be answered.
However, other generic questions from other participants were answered live, in the chat itself.