Construction spending forecast: it's federal, it's state, it's public, it's private, it's over $8 billion dollars, what is it going to build?

• Author: White, Rindi
• Position: SPECIAL SECTION: Building Alaska

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From exploratory drilling in the National Petroleum Reserve-Alaska to a new power plant for the Mat-Su to drilling and site work at Donlin Creek, Livengood, and Pebble mines, workers will be busy all over the state. About 16,500 workers, in fact; that's about how many people work in the construction industry. That's about the same number of employees who worked in the industry last year.

Total construction spending is expected to be up about 8 percent this year. Work in the oil and gas sector is expected to be up a whopping 13 percent, while health care and federal defense spending are both down considerably--by 17 percent in the health care field and 55 percent in national defense construction.

That's according to the yearly Association of General Contractors of Alaska (AGC) construction forecast, an outlook AGC has compiled with Scott Goldsmith at the University of Alaska Anchorage's Institute of Social and Economic Research every year for the last decade. The Construction Industry Progress Fund pays for the forecast.

Why is a forecast needed?

John MacKinnon, executive director of AGC, says the general contractors in the organization's membership count on the yearly construction forecast to help them prepare for the coming construction season.

"Our members have to go to banks and bonding companies and get money for [the coming season]. They have to show there's an outlook, and that it's favorable," he says.

MacKinnon says readers shouldn't make too much of the fact that one sector is up and another is down. Work in each field varies from year to year, he says. While hospital and health care construction is projected to be down this year, it's been up in recent years as local health care providers have added or expanded on their campuses or moved into new locations.

Additionally, he says, federal defense spending might be down this year, but indications are that it will be back up.

"We've heard it's a hiccup in the funding stream," MacKinnon says. "Indications are it will rebound. But you never know what's going to come out of Washington."

Construction related to the Alaska Railroad is also down significantly--57 percent, according to the forecast--but Goldsmith and Alaska Railroad officials say they hope the dip will be temporary. Major users, such as Usibelli Coal Mine in Healy and fuel from Flint Hills, have scaled back operations and are moving less freight. The railroad is continuing work on a major bridge...