Ties that Bind McDowell Group, Inc. Seattle Propeller Club March - PowerPoint PPT Presentation

Ties that Bind McDowell Group, Inc. Seattle Propeller Club March 18, 2015 The Enduring Economic Impact of Alaska on the Puget Sound Region

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 Bronze Sponsors • Alaska Railroad Presenting Sponsor • At ‐ sea Processors Association • Alaska Airlines • Manson Construction • Port of Anchorage Gold Sponsors • Schnitzer • Lynden Transport, Inc. • The Wilson Agency / • Port of Seattle Albers & Company, Inc. • Port of Tacoma • Transportation Institute • Shell Oil Company • U.S. Bank Supporting Sponsors • Totem Ocean Trailer Express • Alaska Salmon Alliance Silver Sponsors • Fifth Third Bank • Alaska Oil & Gas Association • Nexus Northwest • Banner Bank Co ‐ Presenters • Foss Maritime Company • Seattle Metropolitan Chamber of Commerce • Alaska Chamber of Commerce • GCI ConnectMD • Tacoma ‐ Pierce County Chamber of Commerce • Jones Stevedoring Co.

Economic Impact Economic Impacts Alaska ‐ Related Jobs 113,000 Alaska ‐ Related Labor Earnings $6.2 billion • Includes direct, indirect, induced impacts Natural • Alaska “exports”: 74,000 jobs Resources 39,000 • Puget Sound goods/services provided Exports to Alaska 74,000 • Natural resources: 39,000 jobs • Fishing, processing, petroleum, tourism

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

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 5,500 Labor Earnings $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 2008 2009 2010 2011 2012 2013 Northbound Cargo Southbound Cargo

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 jobs 13,100 • $690 million in labor earnings • Government/industry orgs • 650 jobs • $50 million in labor earnings Economic Impacts Fishing Jobs 24,000 Govt/industry 650 10,150 Labor Earnings $1.3 billion

Washington Revenue from Alaska Seafood $4,000 $3,500 $3,000 $818 $Millions $2,500 $619 $2,462 $2,000 $2,074 $1,500 $1,000 $500 $0 2009 2010 2011 2012 2013 WA ‐ Based Processors (Less Fish Cost) 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 14,100 Labor Earnings $554 million

Air and Cruise Passengers: Sea ‐ Tac & Port of Seattle Enplanements or Passengers 1,200,000 1,000,000 800,000 600,000 400,000 200,000 ‐ 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Enplanements to Alaska from Sea ‐ Tac 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 12,000 Labor Earnings $780 million

Petroleum Production: Alaska, Western Canada, and North Dakota 2,500 Alaska North Dakota Canada Oil Sands Barrels/Day (Thousands) 2,000 1,500 1,000 500 ‐ 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013

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 5,300 Labor Earnings $390 million

Health Care • Many services not available in Alaska • Shared providers: Providence, Providence/Swedish, PeaceHealth, Universal • Shared expertise: 10% of Alaska physicians report WA address; WWAMI program Economic Impacts • Puget Sound facilities served over 2,000 Jobs 1,200 Alaska residents in 2013 at Labor Earnings $100 million 33 different facilities (inpatient only)

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 250 Labor Earnings $11 million • Programs: WUE, WWAMI, Alaska scholarships

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

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 • Impacts on Alaska • Available at www.alaskachamber.com www.seattlechamber.com

Ties that Bind McDowell Group, Inc. Seattle Propeller Club March 18, 2015 The Enduring Economic Impact of Alaska on the Puget Sound Region