187 



Ketchikan's economy, and the regional ecoiiomv. are robust and diverse, and are not 

 driven by timber. Contrary to misleading KPC advertisements. KPC's mills are directly 



responsible for only 7.5% of Ketchikan's jobs. In 1995, Ketchikan, a town of 15,000, had 

 7,981 jobs producing $255 million in wages and salanes 28 There are 515 jobs at KPC's pulp mill 

 and around 85 at an adjunct sawmill Together, these directly account for less than 7 5% of 

 Ketchikan's jobs and less than 10% of its total wages Despite steep declines in timber jobs, 

 Southeast Alaska's economy has grown every year for the past eight years, and in 1995 the 

 region's jobs base grew more than any other area of the state ^9 The region is now one of the 

 world's premier cruise ship markets. 



From 1991-95. as Ketchikan's total timber jobs declined by 12%. virtually every other part 

 of the Ketchikan's economy grew, indicating that timber does not drive the economy. 



Construction grew by 24%, transportation, communication and utilities also increased by 24%; 

 retail trade grew by 23%, services grew 18% ^0 Tourist spending nearly doubled ^ • From 1988- 

 94, gross business sales increased by 52%, to $458 million,32 driven largely by tourism. 

 Construction is strong, with conversion of the old Ketchikan Spruce Mill dock into a major new 

 residential and commercial development, also linked to tourism. 



There are other steady, year-round employers in Ketchikan. KPC's Ketchikan mills have 

 600 employees and a payroll of around $25 million. But government is the largest employer in 

 Ketchikan, with 1,783 jobs and a payroll of S68 million. Trade employs 1,625 with a payroll of 

 $36 million. Services employs 1,445 and pays $34 million, Transportation, communication and 

 utilities 770 with $25 million. Construction employs 432 with a payroll of $22 million, and 

 Finance, insurance and real estate employs 3 19 at $8 million" 



These are all year-round employers including many familv-wape jobs. -^'' In 1 993 there were also 

 322 commercial fish penmit holders, holding 543 permits for many different fisheries, earning 18 7 

 million '' 



Ketchikan will go through a transition, just as Sitka did. When the Japanese conglomerate 

 that owned the Sitka pulp mill closed it for business reasons in October 1993, the mill directly 

 accounted for 10% of that city's jobs and around 16% of Sitka's total wages. Ketchikan is 

 considerably less dependent on KPC than Sitka was on its pulp mill when that mill closed. Just 

 two and a half years later, Sitka's economy is healthy. Despite the loss of mill jobs, Sitka's 

 housing starts, single-family housing prices, and gross business sales were all up through 1994,^^ 



^"Alaska Dcpanmcnl of Labor. Emplymcni and Earnings Summary Reports. Ketchikan Gateway Borough. 1995 



^'Alaska Department of 1-abor. Alaska Economic Trends . May 1996. 



^"Alaska Department of Labor. Employment and Earnings Summary Reports. 



^'Hensley testimony, supra 



^^ Ketchikan Gateway Borough Economic Indicators . University of Alaska Ketchikan Campus, 1"94 



''Alaska Depi of Labor. Ketchikan Gateway Borough Employment and Earnings Summary Reports 



'■* Alaska Dept of Labor. Ketchikan Gateway Borough Employment and Earmngs Summary Reports 



'^ Ketchikan Gateway Borougii Economic Indicators . University of Alaska Ketchikan Campus. 1995. Fishing 



income includes crew salaries, but number of crew members is unknown. 



'^Presentation to Moody's Investor Service by Sitka city officials, March 6, 19'>4. 



26-689 - 96 - 7 



