Alaska's economy expands with oil and infrastructure projects
Driving economic growth
Oil and gas development, particularly the Pikka and Willow projects on the North Slope, is a primary economic driver. Pikka is anticipated to begin production by late 2025 or early 2026, contributing to job growth in the sector. Federal infrastructure funding is also stimulating construction across the state, including major airport and port upgrades.
Housing market trends
The housing market is characterized by modest price appreciation and increasing supply. In 2025, average home prices in the Matanuska-Susitna Valley rose by approximately 5%. Anchorage also saw a 4% price growth in 2025, with a median sale price of $533,000.
Migration patterns
Alaska continues to experience net outmigration, with 1,740 more people leaving the state than moving in between 2024 and 2025. However, a natural increase in population (births exceeding deaths) led to an overall population growth of 0.2% during the same period. The Matanuska-Susitna Borough and Kenai Peninsula Borough recorded the highest population gains.
Economic headwinds
Fluctuating oil prices and consistent production levels below historical highs pose concerns for long-term state budget sustainability. Housing shortages and challenges in workforce retention are also expected to influence economic growth and municipal budgets in 2026. Federal workforce directives hint at potential reductions in federal agency operating budgets and hiring.
Key facts
- Alaska's population grew by 0.2% from 2024 to 2025, reaching 738,737 residents by July 1, 2025. (Alaska Department of Labor and Workforce Development, January 2026)
- The Matanuska-Susitna Borough experienced the most population growth between 2024 and 2025, adding 1,696 residents. (Alaska Department of Labor and Workforce Development, January 2026)
- Average home prices in the Matanuska-Susitna Valley rose approximately 5% in 2025. (Alaska Business Magazine, January 2026)
- Alaska is forecasted to add 3,000 jobs in 2026, representing nearly 1% growth. (Alaska Department of Labor and Workforce Development, January 2026)
- The oil and gas sector is projected to lead job growth in 2026 with an 11.1% increase, adding 1,000 jobs. (Alaska Department of Labor and Workforce Development, January 2026)