Across the board, Fairbanks jobs should grow 1.3% in 2025, according to the issue of Alaska Economic Trends released Thursday. But one sector’s forecast is punctuated with a hyphen before the numbers to signal a projected decline: local government.

The department is estimating a 3.6% drop in local government jobs for 2025, from 2,800 positions to 2,700.

“That has to do with the budgetary issues, and the school issues, and the possibility of closures, and ongoing staffing changes related to that budget
deficit,” said Karinne Wiebold, an economist with the Alaska Department of Labor and Workforce Development and author of the Fairbanks section of the report.

The jobs forecast comes just two weeks after the Fairbanks North Star Borough School District Board of Education voted to outsource between 70 and 90 custodian jobs to shrink their looming budget deficit by $3 million.

But Wiebold says that recent decision is not reflected in the January issue of Economic Trends.

“That specific instance is not something we were looking at in there, but it does support this loss of government jobs,” she said.

The school board will still need to navigate a substantial budget deficit over the next few months.

The extent of that deficit depends primarily on funding from the state, which accounts for about two-thirds of the district’s budget.

In November, district administration said the school system would face up to a $32 million shortfall for the upcoming fiscal year if the state doesn’t add structural increases or one-time funding for schools.

Alaska Governor Mike Dunleavy’s proposed budget for the 2026 fiscal year does not include either type of funding boost.

Trending in the opposite direction of local government are transportation and warehousing jobs, which look set to continue their upward trajectory. At 8.3%, it’s the sector with the highest projected growth in Fairbanks.

Wiebold partially attributes that climb to online shopping, as employees transition from brick-and-mortar retail stores to getting behind the wheel of delivery trucks or working in warehouses.

“Think about Amazon. They’re building a sorting facility [in Fairbanks]. Those jobs are now going to be in transportation or warehousing as opposed to jobs in retail, even though they’re still serving the same basic function of getting goods to people in Fairbanks,” she said.

The state labor department is also eyeing a possible squeeze in U.S. government jobs in Alaska, with the incoming Trump administration pledging to reduce the federal workforce.

Because federal employees make up a significant portion of Alaska’s workforce compared to many other states, the Economic Trends issue says reductions could have a greater impact on jobs in Alaska. That’s particularly true for the Fairbanks area, Wiebold said, with many civilian jobs needed to support the multiple military bases in the Interior.

“You’ve just got a lot of federal employees as a concentration of the general workforce there,” she said.

But which federal jobs are on the chopping block, how many, and when cuts be made are still unknowns. And the Economic Trends report suggests a lot of the cuts won’t happen in 2025 regardless, saying those sorts of changes require time to take effect.