Rural Alaska construction: transportation projects dominate spending.

• Author: Bohi, Heidi
• Position: SPECIAL SECTION: BUILDING ALASKA

In rural communities across Alaska, there is a buzz of excitement coming from the buzz of construction projects that are changing the quality of life and potential for growth for the first time in many decades. The streets of tiny villages known for their sleepy, small-town atmosphere are bustling, and everywhere there are hard hats, cranes and crews of construction workers, long awaited signs of progress.

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In transportation, health care, education and energy-related industries there are airport and dock construction projects, boat harbors, clinics, hospitals and new schools that mean those living in the Bush are starting to have some of the same conveniences and critical services their urban neighbors have.

Although it may seem like all of this activity came out of nowhere, in fact rural construction has been steady for several years, says John MacKinnon, executive director of Associated General Contractors (AGC) of Alaska, mainly the result of government funding, as opposed to a greater percentage of privately funded construction projects in urban areas.

As always, numbers don't tell the whole story. And as is typically the case, the influences on Alaska's economic sectors and industries are exclusive to the state's economic climate and often independent of what's going on in the rest of the country.

PUBLIC CONSTRUCTION FORECAST DOWN

Despite the steady level of activity in Rural Alaska, in fact, projections show public construction spending--which funds most of this work--will be down 5 percent, dropping to $2.6 billion, and this even with the cash infusion from the American Recovery and Reinvestment Act (ARRA), according to the 2010 construction spending forecast produced by University of Alaska Institute of Social and Economic Research (ISER) for AGC and its sister organization the Construction Industry Progress Fund. Spending will increase in the utilities and hospitals categories, but will decline in mining, residential, other commercial and the other rural basic sector categories, the report says. A second round of ARRA stimulus funds may be undertaken later this year, but it is too soon to speculate on how that might impact construction spending, ISER says, adding it is assuming there will be no further support from the federal government.

In comparison, private-sector construction spending will be down only 1 percent from 2009, dropping to $4.4 billion. The total value of construction spending "on the street"...