Transcript No Slide Title

Prepared for:
Ketchikan Gateway Borough
Planning and Community Development
Prepared by:
McDowell Group, Inc.
Juneau · Anchorage
September 2010
McDowell Group




Economic conditions
 international/national
 state/regional
 local
Ketchikan Economic Indicators 2010
Alaska Forward
Other McDowell Group research




Shipyard
Arts
Sportfish
Visitor industry

2,000 assignments since 1972

Staff of 14 with offices in Juneau and Anchorage

Multidisciplinary research and consulting

First Ketchikan projects in 1974 :
 Cedar mill feasibility

100 Ketchikan-related assignments
2010

Ketchikan Economic Indicators

Impact of the Arts in the Visitor Industry

Impacts of Nonresident Sportfishing

Economic Benefits of Shipyard Improvements

UAS Ketchikan Campus Benefits Study
China
India
World
U.S.
Euro Area
Japan
Russia
-10%
-8%
-6%
-4%
Source: International Monetary Fund
-2%
0%
2%
4%
6%
8%
10%
$500
$450
$400
$350
$300
$250
$200
$150
$100
$50
$2001
2002
2003
Source: U.S. Bureau of Economic Analysis
2004
2005
2006
2007
2008
2009
2.0%
1.0%
0.0%
-1.0%
-2.0%
-3.0%
-4.0%
-5.0%
-6.0%
Source: U.S. Bureau of Labor Statistics
2.0%
1.0%
0.0%
-1.0%
-2.0%
-3.0%
-4.0%
-5.0%
U.S.
Alaska
Southeast
-6.0%
Sources: U.S. Bureau of Labor Statistics and Alaska Department of Labor and Workforce Development
4.0%
3.0%
2.0%
1.0%
0.0%
-1.0%
-2.0%
-3.0%
-4.0%
Source: Alaska Department of Labor and Workforce Development
Ketchikan Jobs, 1995-2009
8,200
8,000
7,800
7,600
7,400
7,200
7,000
6,800
6,600
6,400
6,200
6,000
1995
1996
1997
1998
1999
2000
2001
2002
Source: Alaska Department of Labor and Workforce Development
2003
2004
2005
2006
2007
2008
2009
16,000
15,000
14,000
13,000
12,000
11,000
10,000
9,000
8,000
Source: Alaska Department of Labor and Workforce Development, and U.S. Census
2.7%
2.5%
2.3%
2.1%
1.9%
1.7%
1.5%
Source: Alaska Department of Labor and Workforce Development, and U.S. Census
12,000
10,000
8,000
6,000
4,000
2,000
0
Wage and salary employment
Source: U.S. Bureau of Economic Analysis
Proprietors employment
Employer
Avg. Monthly
Employment
Ketchikan Gateway Borough School District
300 - 349
Peace Health Ketchikan General Hospital
300 – 349
City of Ketchikan
300 - 349
Alaska Department of Transportation & Public Facilities
300 - 349
Trident Seafoods
150 - 199
Community Connections
150 - 199
Ketchikan Gateway Borough
150 - 199
Alaska Ship & Drydock
100 - 149
A&P (Williams)
100 – 149
Safeway
100 - 149
Source: Alaska Department of Labor and Workforce Development
$450
$400
$350
$300
$250
$200
$150
$100
$50
$0
Wages
Source: U.S. Bureau of Economic Analysis
Proprietors' Income
$800
$700
$600
$500
$400
$300
$200
$100
$0
Earnings
Dividends, Interests, and Rent
Source: U.S. Bureau of Economic Analysis
Transfer Receipts
1995
2008
Transfer
Receipts
17%
Transfer
Receipts
11%
Dividends,
Interests,
and Rent
18%
Earnings
71%
Dividend,
Interests,
and rent
17%
Source: U.S. Bureau of Economic
Analysis
Earnings
66%
$60,000
$50,000
$40,000
$30,000
$20,000
$10,000
$0
Source: U.S. Bureau of Economic Analysis
Wade Hampton
Prince of Wales-Outer Ketchikan
Fairbanks
Sitka
Alaska
$43,922
Juneau
Anchorage
Ketchikan
Skagway
North Slope
Source: U.S. Bureau of Economic Analysis
$52,030
$900
$800
$700
$600
$500
$400
$300
$200
$100
$0
Source: Ketchikan Gateway Borough
$180
$160
$140
$120
$100
$80
$60
$40
$20
$0
Source: Ketchikan Gateway Borough
2008
2009

Prepared brief broad-brush summaries of current
conditions in a variety of sectors in Ketchikan’s
economy.

Included:
 Overview of current activities/status
 Description of multiplier effects
 Outlook

Ketchikan has diverse economic drivers
 Tourism, seafood, shipyard/marine industries, federal
government (USFS, USCG), state government, forest
products, and others

Capacity to influence economic drivers
 Tourism (marketing, infrastructure)
 Shipyard/marine (investment, workforce training)
 Seafood/mariculture (value added)

Ketchikan’s economy has stabilized after years of
decline
 But tourism issues and national recession dampen
short-term outlook

Ketchikan and Alaska have fared better than
other parts of the country during recession
(diversity has helped)

Potential for proactive economic development
to produce results

Alaska Partnership for Economic Development
(APED)
 A collaboration between the state’s regional economic
development organizations (ARDORs) and other
economic development organizations

Phase 1– Situational Analysis
 an “economic reality check” now completed
(www.alaskapartnership.org)
Alaska's oil and
gas sector is
massive (15% of
the national
supply), but in
decline.
Without any new
developments,
we expect
current fields to
be producing
only about onethird of their
current levels by
2030.
Alaska Oil Liquids Capacity Outlook
1.2
Fields in Production
Fields
Under Development
1.0
Fields
Under Appraisal
0.8
Future
Discoveries
Other Discoveries
with Potential
for Development
Million
Barrels 0.6
per Day
0.4
0.2
0.0
2000
2003
2006
2009
2012
2015
2018
2021
2024
2027
2030
Source: IHS CERA
Annual Average Prices
Strong driver
of state
revenue and
personal
income
support.
Oil Price (WTI, US$/bbl)
110
History
Forecast
100
90
80
Dollar Per Barrel
Rising oil
prices have
mitigated the
impact of
declining
production
levels.
70
60
50
40
30
20
10
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
Sources: IHS Global Insight
2018
State and Local Taxes As Percentage of Income, 2008
10.1%
10%
Percentage of Income (%)
Alaska does
not levy
individual
income tax
and state sales
tax and offers
overall low
business tax
environment.
12%
9.7%
9.2%
8.9%
8.4%
8.60%
7.9%
8%
7.0%
6.4%
6%
4%
S tate
Unite d
Source: Tax Foundation
Alaska
Idaho
na
Louisia
ta
te
ta
na
Monta North Dak o South Dako shington Sta
Wa
in
Wy om
g
Private Industry contributed only 12% of the total R&D spending in the state.
R&D Expenditure as Percentage of Gross State Product, 2005
Percentage of Gross State Product (%)
5%
4.37%
4%
3%
2.60%
2.24%
2%
1.06%
1%
0.67%
0.54%
1.14%
0.51%
0.45%
0%
Unite d
S tates
Alaska
Idaho
na
Louisia
ta
te
ta
na
Monta North Dak o South Dakoshington Sta
Wa
Source: National Science Foundation and Bureau of Economic Analysis
Source: Tax Foundation
ing
Wy om

Lack of statewide leadership and coordination of
economic development resources seen as
obstacles, past and present

Alaskans continue to view natural resources as the
greatest opportunity for economic development

Greatest barriers include high cost of
transportation, cost of energy, and federal
regulations

Phase 2: Strategy Development
 Leadership Council formation
 Select clusters for priority attention
 Identify top-level leaders in each cluster
 8-10 month cluster development strategy effort
 Generate cluster-specific priorities
 Identify and address impediments to growth
 Integrate into broad statewide development strategy

Annual average employment of 120 workers in
2009, estimated payroll of $7 million

One of Ketchikan’s largest employers

5th largest employer in Ketchikan in terms of
employment and 2nd largest in terms of payroll

Among the highest wages in the community:
average annual earnings of $55,400, 45 percent
above the Ketchikan average

In 2008, ASD spent $5.3 million with 130
Ketchikan businesses and organizations

Including multiplier effects, the shipyard
accounted for 170 jobs and $8.75 million in
payroll

The counter-cyclical seasonality of the ship repair
business is also an important local benefit

Potential to become a fully sustainable,
competitive marine service center for vessels
operating in the North Pacific and the Arctic
Oceans

With increased capacity and efficiency, shipyard
–related employment could grow to 360 jobs and
with multiplier effects, to 570 jobs
 Project Focus: “Tangible Arts”
 Painting, drawing, print making, design,
photography, sculpture or carving of wood, stone,
metal and other materials, ceramics, glass,
weaving, etc. (excludes performing arts)
 Art created locally and sold to visitors brings new
dollars into the local economy.

Opportunities
 Nearly 1 million visitors (mostly cruise ship passengers)
 Demand for authentic local art
 Provides opportunities for local artists to make a living at their craft

Community art
 Totem, Pile Caps, Stain Glass Panels, Salmon Bus, UAS Mural, Saxman
Village, Southeast Discovery Center, Totem Heritage Center

Promoting the arts
 KVB, KAAHC, Attractions, Businesses, Individual Artists

An important component of Ketchikan arts (economically and
socially) is a strong Northwest Coast Native art tradition.

Visitors who spend even a small amount of time in Ketchikan
will be exposed to Northwest Coast Native art .
Employment (Artist & Retail)
Labor Income
(artists income/retail
payroll & benefits)
Local Spending for Goods &
Services (Artist & Retail)
Total Spending Impact
Direct
Indirect &
Induced
Total Impact
115
25
140
$1,280,000
$250,000
$1,540,000
$795,000
$290,000
$1,085,000
$2,075,000
$540,000
$2,625,000
Ketchikan & POW License Sales and Guided
Sportfishermen, 2008
POW
Ketchikan
Total Nonresident License Sales
9,500
30,400
Nonresident Guided Fishermen
9,100
20,000
Percentage of Guided Nonresident Fishermen
96%
66%
Source: Alaska Department of Fish and Game
Estimated Sportfishing-Related
Ketchikan Employment
2008
Guided Sportfishing Employment
240
Unguided Sportfishing
Employment
POW Businesses Ketchikan-based
Employees
45
20
Retail Sector Employment
35
Total
340
Ketchikan-Based
Employment & Payroll
Employment
Total Payroll
Average Payroll
2008
340
$5,185,000
$15,250
Total Sportfishing-Related
Expenditures in Ketchikan
Ketchikan Sportfishing
$11,893,000
POW Sportfishing-Related
$3,732,000
Total
$15,632,000
2008

Per-passenger spending $135

Total passenger spending $115 million

Cruiseline spending $35 million

Total spending $150 million

Sales tax revenue and dock moorage fees of
$11.6 million

Total visitor industry spending of $163 million

Summer direct and indirect visitor industry
employment of 1,500

Total labor income of $50 million

14% of total Ketchikan employment and 12% of
total Ketchikan labor income
Prepared for:
Ketchikan Gateway Borough
Planning and Community Development
Prepared by:
McDowell Group, Inc.
Juneau · Anchorage
September 2010
McDowell Group