Riding the wave of capital spending.

• Author: Miller, Dirk
• Position: Alaska's construction industry - Special Section: 1990 Associated General Contractors of Alaska Annual Conference

Riding The Wave Of Capital Spending

On a stretch of road about 14 miles from downtown Juneau, Ed Sessions and his crew in September were doing the Alaskan shuffle--six to seven days a week of long, hard work, trying to fit a $4 million road project into Alaska's short construction season.

Fosco Construction Inc. of Juneau had been blasting, bulldozing, digging, surveying and welding pipe against the clock on this 2.7-mile vital stretch of the Glacier Highway, which separates Juneau proper from home and recreational sites north of the city. The road rehabilitation from Point Louisa to Tee Harbor is the biggest road project Juneau has seen in years.

Fosco's situation is not unique. Across the state, builders, road crews and other construction firms raced the advent of winter. But the race this year was bigger than it had been in recent years. Economists say that's been a good sign that Alaska is recovering from an economic slump that began with oil price declines in the mid-1980s.

This year, the state's capital construction budget was $264 million, the biggest expenditure on concrete, steel and lumber by the state in two years. It could have been larger, but Gov. Steve Cowper sliced off $95 million worth in July because of falling oil prices.

Because of the conflict over Iraq's occupation of Kuwait, oil prices have since rebounded from lows of about $14 a barrel when Cowper made his cuts. Lawmakers had based their $3 billion spending plan on oil selling for $19.33 a barrel. By the end of September, North Slope crude had risen to highs above $30 a barrel, prompting state economists to predict that any deficit would be closed.

Government spending has always been an important part of Alaska's economy. While other industries have boomed and busted, government dollars have been a little easier to gauge. Military spending, for instance, in the past has profited both Anchorage and Fairbanks, the state's two biggest cities. This year is no exception.

In Fairbanks, work on projects for the 6th Light Infantry Division and a change of command from Anchorage to Fairbanks have created many jobs. In the Anchorage area, the construction of a $26 million National Guard Armory on Fort Richardson Army Base is probably the biggest military project being completed this year.

Last year, military construction accounted for more than $25 million in Anchorage, according to Elmendorf Air Force Staff Sgt. Stephenie Manwaring. Across the state, total military spending...