Sliding construction jobs set to rise again: economic stimulus projects will build employment market.

• Author: West, Gail
• Position: BUILDING ALASKA

Is Alaska on the same downslide as the rest of the nation after the past few years in a hot construction market? Not really, say economists and the Associated General Contractors (AGC) of Alaska, and that's before the national stimulus package is figured into the picture.

"It will be a little slack in some sectors," said John MacKinnon, executive director of AGC. "Overall, construction spending is down only 3 percent, so it's really pretty flat. Considering all the other states, flat is good. Most states are down double digits in their overall construction projection."

That bodes well for the Alaska economy as a whole. According to Scott Goldsmith, professor of economics with the Institute of Social and Economic Research (ISER) at the University of Alaska Anchorage, construction is one of the state's major economic drivers.

"It's safe to say that construction has been one of the important industries to Alaska," Goldsmith said. "It's proportionately more important here than it is elsewhere in the states. Construction is projected to go down again a little this year, but it's very modest."

In a report created by ISER for AGC and the Construction Industry Progress Fund and released Feb. 6, CIPF's President Jim Fergusson is quoted: "Construction is the third-largest industry in the state, pays the state's second-highest wages, employs nearly 21,000 workers with a payroll over $1 billion, accounts for 20 percent of Alaska's economy and currently contributes approximately $7 billion to the state's economy."

According to the forecast, construction spending for 2009 is expected to total $7.1 billion. Of that figure, $3 billion is attributed to construction in the oil and gas sector--43 percent. Private-sector construction spending, including oil and gas, is estimated at $4.4 billion, and public-sector spending at $2.7 billion.

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"Construction spending in the various sectors is not steady year after year," MacKinnon noted. "For instance, mining is down because it had a couple of years of tremendous growth. Utilities are down from last year because they were up in 2008 due to some large projects, but hospital spending is up this year."

ISER predicts mining spending to drop 25 percent, to $265 million in 2009, and utilities spending is down 31 percent to $392 million. On the other hand, hospital construction spending is up 41 percent to $141 million and public spending for highways is projected to rise 60 percent to $663...