American British Business 2006/7

ABB 2006/7 | State Profiles | Western region | Alaska

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Alaska

Alaska is an enormous state of 1.7 million sq km, roughly eight times the size of the UK. It spans the centre of the Pacific Ocean, centrally-located between the dense populations of Asia and North America. Non-stop flights over the North Pole connect Alaska directly to Europe and 95% of the industrialised world can be reached in a nine hour or so flight from Anchorage. Anchorage International Airport was rated the second most active cargo airport in the US in 2004 and the fourth largest in the world. A $230m expansion project to further modernise the facility and increase capacity was completed this year.

Alaska is also blessed with an abundance of natural resources, which are the primary inputs for many world industries. Demand and prices are increasing for Alaska’s main international exports: seafood, minerals, fertilizers, energy, and precious metals. Many businesses have found it beneficial to vertically integrate their company by securing a direct investment in Alaska’s raw materials. There was more than $1.4bn invested in mineral development and production in 2004. Gold, silver, copper, lead, zinc, platinum, nickel, and coal are found in abundance throughout the state.

The Red Dog Mine is the largest zinc mine in the world. Three other multi-billion dollar gold and copper mines are currently in the production or exploration stage, all owned by Canadian or Japanese mining companies. Oil and gas are cornerstones of the economy, and British Petroleum is a leader among many international companies with significant investment in the state. A wealth of undiscovered wells are waiting for exploration. Alaska is negotiating on applications to build a $20bn dollar natural gas pipeline to transport trillions of cubit feet of known reserves to market.

International exports from Alaska have been improving consistently. In 2003, exports increased 9% and grew another 15% in 2004. The success has continued in the first half of 2005, climbing another 11%. At this pace, it will finish the year at $3.5bn, or 75% higher than 1998. The phenomenal increase of exports is just one indicator of the real economic progress we are seeing throughout the state. Alaska’s gross state product of, comparable to GDP for a country, has increased 6.6% and 6.8% in the last two years, a growth of $4.2bn.

Asia remains Alaska’s principal export market, with Japan, Korea, and China consuming two thirds of the products. Europe is also showing great promise as an export destination, representing 13 of Alaska’s top 20 trading partners. Seafood accounts for a majority of European purchases. In 2004, Alaska exported $1.7bn in seafood products worldwide, a 21% increase over 2003.

Alaska has one of the lowest business tax rates in the country, and is the only one of the 50 United States with no statewide personal income or sales tax. There is actually so much extra money left over from oil royalties paid to the State that each man, woman and child receives a dividend check from the government of approximately $1,100 each year.

Alaska has now prospered through 17 years of uninterrupted job growth. The prolonged expansion is a testament to the stability of Alaska’s economy.

For more information, contact:
Alaska Office of Economic Development
PO Box 110804
Juneau, Alaska, 99811-0804
Tel: +1 (907) 465-5478
Fax: +1 (907)465-3767
E-mail: caryl_mcconkie@commerce.state.ak.us
Website: www.commerce.state.ak.us/oed

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