Ties that Bind
The Enduring Economic Impact of Alaska on the Puget Sound Region
McDowell Group, Inc.
Juneau Chamber of Commerce
March 26, 2015
McDowell Group
• Research and consulting since 1973
• 15 professional staff
• Offices in Juneau, Anchorage, Bellingham
• Areas of expertise: mining, oil & gas, tourism, seafood, transportation, health care, education
• Services: economic and socioeconomic analysis, surveys, market research, feasibility studies, community planning, program evaluation
About Ties That Bind
• Previous reports: 1985, 1994, 2003
• Six counties: King, Kitsap, Pierce, Snohomish, Skagit, Whatcom
• Sources: government agencies, industry‐
specific impact reports, McDowell Group data, interviews, business survey
• IMPLAN for economic impact analysis
Sponsors
Presenting Sponsor
• Alaska Airlines Gold Sponsors
• Lynden Transport, Inc. • Port of Seattle • Port of Tacoma
• Shell Oil Company
• Totem Ocean Trailer Express
Silver Sponsors
• Alaska Oil & Gas Association
• Banner Bank • Foss Maritime Company
• GCI ConnectMD
• Jones Stevedoring Co.
Bronze Sponsors
• Alaska Railroad
• At‐sea Processors Association
• Manson Construction
• Port of Anchorage • Schnitzer
• The Wilson Agency / Albers & Company, Inc.
• Transportation Institute • U.S. Bank
Supporting Sponsors
• Alaska Salmon Alliance
• Fifth Third Bank
• Nexus Northwest
Co‐Presenters
• Seattle Metropolitan Chamber of Commerce
• Alaska Chamber of Commerce
• Tacoma‐Pierce County Chamber of Commerce
Economic Impact
Economic Impacts
Alaska‐Related Jobs
Alaska‐Related Labor Earnings
113,000
$6.2 billion
• Includes direct, indirect, induced impacts
• Alaska “exports”: 74,000 jobs • Puget Sound goods/services provided to Alaska
• Natural resources: 39,000 jobs • Fishing, processing, petroleum, tourism
Natural Resources
39,000
Exports
74,000
Impact Trends
Jobs
103,500
2003
113,000 (+9%)
2013
Labor
Earnings
$4.3 billion
2003
$6.2 billion (+12%*)
2013
*Adjusted for inflation.
Ties that Bind: Sectors
• Cargo/freight
• Seafood
• Passenger transportation/tourism
• Petroleum
• Maritime support
• Health care
• Education
• Tribal Ties
Freight and Cargo
Freight and Cargo
• 3.4 million tons moved between Puget Sound and Alaska in 2013
• 80% northbound, 20% southbound
• 97% water, 2% truck, 1% air
• Trade with Alaska accounts for over 80% of domestic containerized shipments at Ports of Seattle and Tacoma (20% of total)
Economic Impacts
Jobs
Labor Earnings
5,500
$450 million
Alaska‐Washington Waterborne Cargo (Tonnage)
3,500,000
3,000,000
2,500,000
2,000,000
1,500,000
1,000,000
500,000
0
2003
2004
2005
2006
2007
Northbound Cargo
2008
2009
2010
2011
Southbound Cargo
2012
2013
Seafood
• Largest Alaska‐Puget Sound Sector
• Three components: • Commercial fishing
• Seafood processing • Government & industry orgs.
• Puget Sound residents own nearly 1,000 vessels participating in Alaska commercial fisheries
• 36 processors based in Puget Sound account for 82% of first wholesale value in 2013
Seafood Impacts
• Commercial fishing
• 10,150 jobs
• $600 million in labor earnings
• Seafood processing
Processing
13,100
• 13,100 jobs • $690 million in labor earnings
• Government/industry orgs
• 650 jobs
• $50 million in labor earnings
Economic Impacts
Jobs
Labor Earnings
24,000
$1.3 billion
Fishing
10,150
Govt/industry
650
Washington Revenue from Alaska Seafood
$4,000
$3,500
$Millions
$3,000
$2,500
$2,000
$818
$619
$2,462
$2,074
$1,500
$1,000
$500
$0
2009
2010
WA‐Based Processors (Less Fish Cost)
2011
2012
2013
Gross Fishing Earnings ‐ WA Residents
Transportation & Tourism
• Sea‐Tac: 1.1 million Alaska‐
bound air passengers • Port of Seattle: 430,000 Alaska cruise passengers • Alaska Marine Highway: 14,000
Alaska ferry passengers Economic Impacts
Jobs
Labor Earnings
14,100
$554 million
1,200,000
1,000,000
800,000
600,000
400,000
200,000
Enplanements to Alaska from Sea‐Tac
2013
2012
2011
2010
2009
2008
2007
2006
2005
‐
2004
Enplanements or Passengers
Air and Cruise Passengers: Sea‐Tac & Port of Seattle
Cruise Passengers from Port of Seattle
Petroleum
• Five refineries in Puget Sound: Ferndale (2), Anacortes (2), Tacoma
• Alaska is #1 supplier of crude to Puget Sound’s refineries (46% of their volume)
• 265,000 barrels/day
Economic Impacts
Jobs
Labor Earnings
12,000
$780 million
Petroleum Production: Alaska, Western Canada, and North Dakota
Alaska
North Dakota
Canada Oil Sands
2,000
1,500
1,000
500
2013
2011
2009
2007
2005
2003
2001
1999
1997
1995
1993
1991
1989
1987
1985
1983
‐
1981
Barrels/Day (Thousands)
2,500
Maritime Support
• Services include ship construction, repair, maintenance, supply of marine‐related goods and equipment, & manufacturing
• Vessels from Washington represent 56 percent of Alaska fleet’s gross tonnage
Economic Impacts
Jobs
Labor Earnings
5,300
$390 million
Health Care
• Some services not available in Alaska
• Shared providers: Providence, Providence/Swedish, PeaceHealth, Universal
• Shared expertise: 10% of Alaska physicians report WA address; WWAMI program
• Puget Sound facilities served over 2,000
Alaska residents in 2013 at 33 different facilities (inpatient only)
Economic Impacts
Jobs
Labor Earnings
1,200
$100 million
Education
• Washington is #1 state for Alaska students attending out‐
of‐state
• 600+ Alaska students at Puget Sound institutions
• 35 different Puget Sound Economic Impacts
institutions 2005‐12
Jobs
Labor Earnings
• Programs: WUE, WWAMI, Alaska scholarships
250
$11 million
Tribal Ties
• Five regional ANCSA corporations operate 14 subsidiaries in Puget Sound
• Subsidiaries represent a range of sectors: engineering, construction, security, timber, consulting
• 850+ people employed in WA
• $51 million+ in direct payroll in WA
Additional Ties
• Federal government
• NOAA/NMFS
• EPA Region 10
• Military
• Business/professional services
• Finance/banking/accounting
• Public relations
• Engineering
• Law
• Consulting
Puget Sound’s Impact on Alaska
• Provides a market for Alaska crude oil
• Provides a market conduit for Alaska fish
• Provides access to essential goods and materials not produced in Alaska
• Provides an important supplement to the Alaska labor force
• Serves as Alaskans’ gateway to the Lower 48 and the world
Outlook
DOWNSIDE/FLAT
• Declining oil production and prices
• Cargo, population, overall economic activity
• Alaska population projections modest at 1% annual
• Seafood: stable value for 2015 (pending salmon season);
Alaska‐based processors growing
• Limited cruise growth capacity
UPSIDE
•
•
•
•
•
Potential big projects: gas pipeline, OCS oil and gas development
Seafood: Long‐term upside due to resource size, management, & branding
Maritime services: aging Alaska fleet needs replacement
Tourism: will grow along with nationwide economy
Strong Puget Sound economy and population growth
• Alaska‐Puget Sound ties will continue to strengthen as economies and populations grow
More in the Report!
• Overview of each economy
• Additional detail on each sector
• Trends
• Outlook • Available at www.alaskachamber.com
www.seattlechamber.com Ties that Bind
The Enduring Economic Impact of Alaska on the Puget Sound Region
McDowell Group, Inc.
Juneau Chamber of Commerce
March 26, 2015