1. 2009 Economic Forecast Update & Three -Year Outlook

2. Mid-Year 2009 Forecast Update Solid growth in 2008 Predicted 100 fewer jobs in 2009, a <0.01% decline January through June 2009 average employment up 850 jobs (+0.6%) over same period in 2008 2001 2002200320042005 2006 2007 2008 EST 2001 200220032004200520062007 2008 EST ANCHORAGE EMPLOYMENT 2001-2008, 2009 Estimate

3. Government Sector Predicted no new jobs in 2009 720 more jobs during the first six months of 2009, compared to the same period 2008 2001 200220032004200520062007 2008 EST ANCHORAGE GOVERNMENT EMPLOYMENT Excluding Uniform Military Personnel 2001-2008, 2009 Estimate

4. Oil and Gas Sector Predicted no change in 2009 70 fewer jobs during the first six months of 2009, compared to the same period 2008 2001 2002200320042005 2006 2007 2008 EST 2001 200220032004200520062007 2008 EST ANCHORAGE OIL INDUSTRY EMPLOYMENT 2001-2008, 2009 Estimate

5. Other Sectors So far, losses felt in several sectors -220 jobs in wholesale and retail trade -120 jobs in air transportation -150 jobs in leisure & hospitality -320 jobs in construction Health care (up 520 jobs) and business & professional services (up 230 jobs) job growth strong, but may taper off by year’s end

6. Looking Forward Three Years Take a look at the “Big Picture” and consider the forces shaping the Anchorage economy: Where are these forces taking us?

7. Population Growth Population grew average of 1.1% annually over the past decade 0.9% growth in population 2007-2008 Population projected to grow 0.5% annually from 2009-2012 ANCHORAGE POPULATION 2000-2008, 2009-2012 Projections 2001 200220032004200520062007 2008 EST 2009 EST 2011 EST 2010 EST 2000

8. Employment 20 th year of consecutive growth in 2008 (+1.7% over 2007) Employment expected to be flat in 2009 and 2010 with a slow growth trend between 0.5- 1% annually in 2011 and 2012 ANCHORAGE EMPLOYMENT 2001-2008, 2009-2012 Projections 2001 200220032004200520062007 2008 EST 2009 EST 2011 EST 2010 EST

9. Personal Income Anchorage residents earned $12.8 billion in personal income in 2007, up 5% since 2006 Growth is forecast to slow in the next three years -- Slower employment growth -- Decreasing investment returns -- Lower business profits ANCHORAGE PERSONAL INCOME 2001-2007, 2008-2012 Projections ($Billion) 2001 20022003200420052006 2007 EST 2008 EST 2009 EST 2011 EST 2010 EST

10. Building Permit Values ANCHORAGE BUILDING PERMIT VALUES 2003-2008, 2009-2012 Projections ($ Million) Residential and commercial permit values down, and government permits are up in the first 5 months of 2009 over the same period 2008 Total building permit values in 2009-2010 will remain static, with slow growth (1 to 2%) in 2010 and 2012

11. Anchorage Air Passenger Traffic Traffic has declined in 2009, down 10% in the first five months 2009 compared to the same period 2008 Traffic is expected to recover in 2010, 2011 and 2012, at an annual rate of 1% ANCHORAGE PASSENGER VOLUME 2003-2008, 2009-2012 Projections (Millions) 2001 200220032004200520062007 2008 EST 2009 EST 2011 EST 2010 EST 2000

12. Anchorage Air Cargo Volume Cargo volumes have declined significantly in 2009, down 35% in the first five months 2009 compared to the same period 2008 Modest recovery is expected in 2010 through 2012 with 2% annual growth ANCHORAGE AIR CARGO VOLUME 2003-2008, 2009-2012 Projections (Thousand Tons) 2001 200220032004200520062007 2008 EST 2009 EST 2011 EST 2010 EST 2000

13. Port of Anchorage Freight Volume Volume down from peak in 2005 9 cruiseship stops in 2010 Volume expected to decline 5 percent in 2009 and moderately increase (5 to 8% annually) in 2010 to 2012 PORT OF ANCHORAGE FREIGHT VOLUME 2000-2008, 2009-2012 Projections (Thousand Tons) 2001 200220032004200520062007 2008 EST 2009 EST 2011 EST 2010 EST 2000

14. Visitor Industry Early indicators for 2009 season show decline: -- Anchorage air traffic is down -- Projected cruise visitation is flat -- Alaska Highway border crossings are down Convention business may weaken in 2010, but recover in 2011 and 2012 With Anchorage as a new port of call, local businesses will benefit from cruise passenger spending

15. Oil Prices Oil prices expected to hold steady around current prices for the rest of 2009 In the long-term, as economies recover, oil prices are expected to increase; yet remain below 2008 record levels ANNUAL AVERAGE CRUDE OIL PRICES 2000-2008, 2009-2012 Estimates ($Barrel) 2001 200220032004200520062007 2008 EST 2009 EST 2011 EST 2010 EST 2000

16. In Closing Overall, Anchorage’s economy is expected to be flat in 2009 and 2010 Some sectors will experience growth, while others will experience declines in 2009 Economic recovery is expected in 2011, gaining momentum in 2012

17. Thank you for your attention! Today’s presentation and 3-year economic forecast can be viewed and downloaded at www.AEDCweb.com