1. State of the Sitka Economy, 2008
Prepared for: Sitka Economic Development Association
Prepared by: McDowell Group, Inc. March 25, 2008

2. Presentation Contents
State of the Sitka Economy
Southeast Regional Economy
Visitor Industry Indicators
Seafood Industry Profile
Development Issues and Opportunities

3. I. State of the Sitka Economy

4. Sitka’s Balanced Economy Employment by Sector, 2006
Source: ADOLWD

5. Sitka Population
Source: ADOLWD

6. Sitka Employment
Source: ADOLWD

7. Sitka Payroll 1997-2006 ($ Millions)
Source: ADOLWD

8. Sitka Gross Business Sales 1997-2007 ($ Millions)
Source: City of Sitka

9. Sitka Construction Activity Number of New Dwelling Units 1997-2007
Source: City of Sitka

10. Number of Lots Absorbed 2000-2007
Source: City of Sitka

11. Sitka School Enrollment School years 2002-2008
% Change
2002
1,610 -
2003
1,550
-3.7%
2004
1,466
-5.4
2005
1,477
+0.8
2006
0.0
2007
1,454
-1.6
2008
1,380
-5.1
Source: Sitka School District (OASIS Report)

12. 2006 Average Monthly Wages Alaska Sitka Government $3,679 $3,335
Construction $4,864 $3,990
Service-Providing $2,937 $2,483
Financial $3,742 $3,146
Professional & Business $3,864 $2,109
Education & Health $3,087 $3,428
Leisure & Hospitality $1,508 $1,310
Source: AKDOLWD

13. Recent Changes Sheldon Jackson College closed SEARHC cutbacks
Loss of 109 jobs
SEARHC cutbacks
Loss of 40 jobs in Sitka, 60 region-wide
U.S Forest Service cutbacks
Loss of 5 jobs by 2010
Last year 6 employees resigned and will not be replaced
Opening of Silver Bay Seafoods
170 seasonal jobs created
10 full-time, year-round staff
Sitka Community Hospital purchased Moore Clinic
Increases in ferry port calls for 2008

14. Sitka Economic Indicator Overview
Diverse economy (5 sectors with 10% or more of Sitka’s total employment)
Population declined 4% (349 residents) from 2006 to 2007
Employment declined by 9 jobs from 2005 to 2006
A greater decline is expected to be reflected in the 2007 figures
Payroll up $3 million
Gross business sales continued to grow in 2007
Construction activity is down
School enrollment declined 5% (74 students)
Employment opportunities in Sitka have declined recently.
Good paying jobs in education, federal government, and healthcare have been lost.

15. II. Southeast Regional Economy

16. Regional Population Trends 2006-2007
Average Annual % Change
Statewide Total
+0.9
Region Total
-1.5
Sitka
-4.0
Juneau
-1.7
Ketchikan
-0.3
Wrangell-Petersburg
-0.4
Prince of Wales
-2.8
Skagway-Hnh-Ang
-0.5
Haines
-0.8
Source: ADOLWD

17. Southeast Alaska Population Trends 2005-2007
2006
2007
Change
06-07
Region Total
70,891
70,405
69,328
-1,077
Sitka
8,944
8,989
8,640
-349
Juneau
31,225
30,811
30,305
-506
Ketchikan
13,131
13,201
13,160
-41
Wrangell-Petersburg
6,167
6,039
6,016
-23
Prince of Wales
5,510
5,479
5,328
-151
Skagway-Hnh-Ang
3,063
3,016
3,001
-15
Haines
2,208
2,239
2,257 18
Source: ADOLWD

18. Southeast Employment 2007 Employment increased by 50 jobs Changes in:
Leisure and Hospitality +200 jobs
Service Providing +150 jobs
Retail Trade +50 jobs
Local Government +50 jobs
Seafood Processing -50 jobs
Education and Health services -50 jobs
Goods Producing -100 jobs
State Government -100 jobs
Source: ADOLWD –Current Employment Statistics Program (CES)

19. Southeast Summary Regional population down 1.5% (1,077 residents)
Employment up by 50 jobs
Highest growth in the leisure & hospitality and service providing sectors
Largest decline in the goods producing and state government sectors

20. III. Visitor Industry Indicators

21. Alaska Full-Year Visitor Volume, May 2006-April 2007 By Transportation Market
Total Visitors: 1,881,000
Source: Alaska Visitor Statistics Program (AVSP), McDowell Group, Inc.

22. Full Year Visitor Volume May 2006 – April 2007
Alaska
1,881,000
Southeast
1,190,000
Sitka
291,000
Source: AVSP, McDowell Group, Inc.

23. Southeast Cruise Passenger Volume 1997-2007

24. Sitka Cruise Ship Visitors 1997-2007

25. Deplaning Passengers, Sitka Airport* 1997-2007
Source: Bureau of Transportation Statistics * includes residents and non-residents

26. Disembarking Ferry Passengers* 1997-2007
Source: AMHS * includes residents and non-residents

27. Sitka Passenger Volume, 2007
2006
2007
% Change
Cruise Visitors
267,000
233,936
-12.4%
Air Passengers
70,334
69,379
-1.4%
Ferry Passengers
13,400
14,529
+8.4%

28. Sitka Hotel Bed Tax Receipts 1997-2007
Source: City of Sitka

29. Visitor Traffic Summary
Alaska visitor volume 1,881,000
51% visit by cruise ship
44% visit by air
5% visit by highway/ferry
Southeast cruise passenger volume continued to grow
Over 1 million visitors in 2007
Sitka visitor volume declined
Cruise visitors down 12.4%
Deplaning air passengers down 1.4%
Disembarking ferry passengers up 8.4%

30. IV. Seafood Industry Profile

31. Major SE Fisheries 2007 Ex-vessel Value

32. SE Regional Ex-Vessel Values 2002-2006
Salmon
Non-Salmon
Total
2002
$ 48,508,934
$ 80,470,869
$ 128,979,803
2003
$ 55,136,780
$ 87,979,986
$ 143,116,766
2004
$ 76,890,456
$ 99,209,693
$ 176,100,149
2005
$ 80,861,977
$ 105,074,198
$ 185,936,175
2006
$ 95,008,717
$ 114,935,387
$ 209,944,105
Source: COAR

33. Southeast Land-based Seafood (Production, 2006)
Pounds
Value
Ex-vessel:
Salmon
172,552,615
$91,210,751
Non-salmon
55,284,243
$110,596,941
Total
227,836,857
$201,807,693
First Wholesale:
131,214,5634
$220,028,636
Non-Salmon
50,320,383
$147,810,251
181,534,917
$367,838,886
Source: COAR

34. Sitka Land-based Processor (Production, 2006)
Pounds
Value
Ex-vessel:
Salmon
27,731,996
$24,902,084
Non-salmon
13,513,073
$33,693,816
Total
41,245,069
$58,595,899
First Wholesale:
22,234,856
$48,508,479
Non-Salmon
11,518,109
$44,410,580
33,752,965
$92,919,058
Source: COAR

35. SE Ex-Vessel Prices Per Pound 2005-2007
King $2.53 $3.37 $3.06
Sockeye $1.05 $1.09 $0.89
Coho $0.95 $1.41 $1.09
Pink $0.12 $0.12 $0.19
Chum $0.30 $0.35 $0.35
Halibut $3.11 $3.80 $4.41
Sablefish $2.30 $2.55 $2.75
Source: ADF&G/NOAA

36. Sitka Fishermen Statistics 2006
736 permits fished
455 fishermen
Landed 28.4 million pounds
Ex-vessel value of $37.6 million
Source: CFEC

37. Sitka Fishermen Ex-Vessel Earnings 2002-2006
$ 22,874,149
2003
$ 27,117,481
2004
$ 33,920,720
2005
$ 33,425,575
2006
$ 37,645,735
Source: CFEC

38. Sitka Seafood in 2007
Sitka ranks as the 6th largest port in the U.S. based on value and 19th based on volume
Chum salmon harvest volume down
Pink salmon harvest volume up
Herring harvest volume up in 2007, and a record quota has been set for the 2008 harvest
King salmon harvests down in 2007
Coho harvests down in 2007
Processing capacity in Sitka has increased

39. Seafood Summary
Salmon accounted for 52% of the SE total ex-vessel value
Halibut and sablefish accounted for 34% of the region’s total ex-vessel value
Salmon ex-vessel prices down for all species except pink salmon
Halibut and sablefish ex-vessel price increase continued

40. V. Sitka Development Issues and Opportunities

41. Development Issues Major community development issues are: Assessment:
Control: What do we have control over in regard to development?
Choice: What do we choose to support or discourage?
Current Sitka Players: Most economic development is done by those already here
Assessment:
Ask the experts to identify opportunities and barriers
Surveys and focused discussion groups

42. Development Opportunities
Seafood Industry
Marine Services
Tourism
Government (in all its forms)
Real Estate

43. State of the Sitka Economy, 2008
Prepared for: Sitka Economic Development Association
Prepared by: McDowell Group, Inc. March 25, 2008