Economy

The utilization of its natural resources—especially fish, forests, and minerals—has long been Alaska's chief economic activity. Since World War II, however, and especially since statehood was achieved in 1959, a more diversified economy has developed. More of the resources are extracted and processed, and new industries have arisen.

Admission to statehood was followed by a sizable influx of people. This in turn brought increased housing and other construction, greater wholesale and retail trade, and improved transportation and communications. The tourist industry also grew considerably. The federal government is the largest single employer in the state, mainly through military installations and defense projects.

Manufacturing, other than the relatively simple processing of resources, is little developed. Most of the consumer goods and virtually all industrial equipment are imported. Manufacturing, however, has considerable potential because of the state's wealth of resources and possibilities for hydroelectric power. Probably the chief hindrance to industrialization has been the smallness of the population.

By value of the catch, Alaska is the leading fishing state, and the fishing industry is an important segment of its economy. Fishing fleets and canneries are major sources of income and employment in coastal cities of the south. Kodiak and Dutch Harbor-Unalaska are the chief fishing ports.

Salmon is the most valuable fish; the catch consists primarily of sockeye (red) and pink salmon. The crab catch, made up mainly of king and snow crabs, is also extremely valuable. Halibut and shrimp are also a significant part of the catch.

By value, petroleum is the state's leading product. It was first discovered on the Kenai Peninsula in 1957; major deposits have since been found in Cook Inlet and in the Prudhoe Bay area on the North Slope. The Prudhoe Bay strike, made in 1968, is one of the largest ever made in North America. A pipeline, completed in 1977, carries oil 789 miles (1,270 km) from the Prudhoe Bay field to the ice-free port of Valdez for export. Natural gas is produced in the Kenai and Cook Inlet fields. The reserves are enormous but production is limited by the lack of adequate transportation facilities. Zinc is mined in large amounts near Kotzebue. The Greens Creek Mine, near Juneau, is one of the nation's largest silver producers. The state is also known for mining a significant amount of gold.

Lumber and pulp wood are also among Alaska's principal products. The most important sources of timber are in the Tongass and Chugach national forests.

Their coastal location in the south makes water transportation of logs and wood products possible. Ketchikan and Sitka are among the cities with mills. Most of the forest products are exported, mainly to Japan. Interior forests of commercial quality are kept from full economic development by lack of transportation.

Tourism provides a significant and growing source of income for Alaska. The state is especially noted for the natural beauty of its wilderness, which includes rugged mountains, massive glaciers, and vast expanses of arctic tundra. Alaska's many state and national parks are major attractions for visitors.

Alaska produces very little of the food needed in the state, for agriculture is limited in both area and production. Only a tiny part of the land is devoted to crops; the pastured area is somewhat larger. Most of the farming is carried on in the Matanuska Valley, northeast of Anchorage; the Tanana Valley, near Fairbanks; on the Kenai Peninsula; and on the island of Kodiak. Dairy products (mainly milk), beef cattle, barley, oats, hay, and potatoes are the chief products.

An extremely short growing season, frequent early and late frosts, and poor, thin soils hinder agricultural expansion. Much remains to be done in land utilization research.

Almost all of the state's roads are in southern Alaska. The Alaska Highway, leading southeastward from Delta Junction (south of Fairbanks), is the only road link with the lower 48 states. Also in the south is all of the trackage of the state's two railways. One is the state-owned Alaska Railroad (between Seward and Fairbanks). The other is the privately owned White Pass and Yukon Railway (between Skagway and Whitehorse in Yukon Territory, Canada).

A passenger and automobile ferry service operates in the sheltered waters of the Inside Passage, between Skagway and Prince Rupert, British Columbia. There is also service to Seattle, Washington. In addition, ferry service is available between Anchorage, Kodiak Island, and Seward, and on Prince William Sound.

Air travel has been a major factor in opening Alaska's interior and north and west coasts to development. Airports at Anchorage, Fairbanks, and Juneau handle most commercial flights.