Alaska’s GDP has stagnated, with growth ranking near the U.S. bottom, analysis shows
Yereth Rosen, Alaska Beacon, June 20, 2025
Alaska’s gross domestic product grew more slowly over the past decade than that of all other states except for one, according to a Department of Labor and Workforce Development analysis.
The state’s GDP – the value of all goods and services – rose by only 0.4% annually on average from 2015 to 2025 when adjusted for inflation, according to the analysis in this month’s Alaska Economic Trends, the magazine published by the department’s research and analysis section. Only North Dakota has slower growth during the period, averaging 0.2% a year.
In comparison, the national annual growth rate for the period, adjusted for inflation, was 2.1% over the period, and the median growth rate — with half the states above and half below — was 1.7%.
Without adjustments for inflation, the state’s growth might appear robust: an annual average of 8.2% from 2020 to 2024. But that nominal rate is misleading because the period was marked by high inflation, the analysis points out.
It focuses instead on “real” GDP, which factors in inflation. In real terms, Alaska’s total GDP peaked more than a decade ago, when oil prices were highest. There were only three years between 2015 and 2024 when Alaska showed real GDP growth — 2017, 2021 and 2022 — which also were the only years when Alaska’s growth outpaced the national average, the analysis found.
The statistics demonstrate the state’s economic vulnerability, said Sam Tappen, the state economist who did the analysis and wrote the Trends article.
“The fact that we’ve had such long-term stagnation, I think, is troubling,” he said.
The statistics reflect Alaska’s dependence on oil and the price of that commodity, which depends on world markets and global events beyond the state’s control.
The volatility of oil prices has an outsized impact on Alaska’s economy, he said. “Oil just tends to push around the total,” he said.
Beyond the period of high oil prices, there were two different years of steep drops: 2015, when a plunge in oil prices caused a 9% drop in GDP, and 2020, when Alaska’s real GDP fell 7.1% amid the global COVID-19 pandemic disruptions.
Not coincidentally, other states at or near the bottom — North Dakota, Wyoming and Louisiana — are also highly dependent on oil and gas.
The good news in the statistics is that outside of the oil-dominated mining sector, the state’s real gross domestic product has been increasing. “All the other industries are typically growing pretty steadily,” Tappen said.
But even that good news is tempered by the reality that nonoil sectors of the economy depend to a large degree on oil.
That includes the strong transportation and warehousing sector, which accounts for a little over 14% of Alaska’s total gross domestic product and is among the sectors with the highest real growth. More than half of the sector’s output is directly tied to the oil industry, Tappen pointed out.
Other sectors with notable growth, averaging around 3% annually, were leisure and hospitality, construction, private health and education. The oil-dominated mining sector declined at an average annual rate of 2.6%, and the natural resources sector, which includes seafood harvesting, declined at an annual average of 3.9%, Tappen’s research found.
Gross domestic product is just one measure of an economy, Tappen’s article points out. There are other measures, including employment and income.