Four Things We Learned at Northrim Bank's 2018 Economic Summit Editorial Board
Northrim Bank Chairman, President, and CEO Joe Shierhorn speaks during Northrim's 2018 Economic Summit. Before the afternoon's luncheon, Northrim held an editorial board to field questions from the press.
Credit: Alaska Business
Northrim Bank presented its annual Economic Summit in Anchorage April 9, this year inviting key note speakers Mouhcine Geutabbi, PhD, assistant professor of economics at ISER at UAA and Tim Bradner, energy columnist and the 2017-2018 Atwood Chair of Journalism for UAA.
Previous to the luncheon, Northrim Bank hosted an editorial board with Geutabbi, Bradner, and bank leadership including Joe Schierhorn, chairman, president, and CEO; Jed Ballard, executive vice president and CFO; and Michael Martin, executive vice president, general counsel, and corporate secretary. The panel answered questions and shared insight about the past, present, and future of Alaska’s economy.
Listed below are just a few takeaways of the editorial board.
#1: Look up with caution
Geutabbi said “cautious optimism” is a safe approach to looking forward at Alaska’s economy. While he sees job losses continuing in 2018, those losses have slowed and may come to a halt this year for the oil and gas and construction industries, though he anticipates that the local government sector, which until now has remained relatively steady, may see job losses throughout the year. He explained while the rate of decline of jobs has slowed, “it is a mistake to think of this as a sign of recovery.”
#2: A solution in sight(?)
Bradner has been keeping a close eye on Alaska’s Legislature and reported that he’s optimistic that it will vote on and pass a fiscal plan for the state before this session ends. He said there’s sense of agreement that the earnings of the Alaska Permanent Fund will have to be used to run state government and a generally accepted figure for that draw is approximately a rate of 5.2 percent. That’s by no means a final figure, and regardless of the final result, any plan to withdraw money from the Permanent Fund won’t entirely cover the state’s budget deficit, which means once again it’s likely funds will be pulled from the Constitutional Reserve, which he said still retains roughly $2 billion.
#3: Project progress
Bradner also spoke about the oil and gas industry specifically, saying that there’s also cautious optimism on Alaska’s North Slope. ConocoPhillips will be producing oil from GMT-1 relatively soon and is making good progress on GMT-2. Other recent discoveries on the Slope and projects underway may also feed new oil into TAPS, which on its own is great news for Alaska. Oil prices have been inching up, and investment on the North Slope continues.
#4: The worst is behind us
Northrim Bank leadership said that, in general, 2018 appears to be a year of improvement for the state and that the worst of this recession is now in the past. Much depends on the legislature, as the uncertainty created by a lack of a statewide fiscal plan has created an environment of caution and uncertainty for businesses in every industry across the state. Just having a plan can restore not only confidence locally but also for national and international companies that may consider Alaska for investment opportunities.