Slow rise.

• Author: Richardson, Jeffrey
• Position: Construction industries of Alaska moving towards economic recovery

Short of a comeback, but enough of a boost to revive the suffering industry, Alaska's construction activity is creeping upward.

In an industry as volatile as construction playing with numbers can be like playing with fire: It can lead to an overheated sense of confidence. As Alaska's prosperity indicators continue to rise from their deep, mid-1980s slump, many construction companies are not yet feeling the sense of relief and optimism now permeating other sectors of the economy.

"In my segment of the industry, we're definitely not out of the woods yet," says Greg Romack, president of Davis Constructors and Engineers of Anchorage. "We're all real concerned about the coming season."

A more buoyant assessment is offered by Brad West of Anchorage-based Construction and Rigging Inc.: "I think things are going to be fine if oil stays steady at some mid-range, say above $15 a barrel."

Where construction experts do disagree, they tend to diverge because different parts of the industry are responding differently to the economy. Sectors making up the construction industry are not always sharply defined, but generally it is useful to look at home construction; commercial construction; and heavy construction, which usually involves large industrial or public infrastructure projects.

Assessments of the construction industry's performance during the continuing recovery note the following trends:

* Homebuilding will continue its recent growth pattern, though not nearly as dramatically in real numbers as percentages would suggest.

* Commercial building will increase little, if at all, for a number of reasons.

* A March decision to cancel the Air Force backscatter radar project in the Interior was just the latest sign of a continuing downward trend in military construction.

* Despite political haggling, there will be a state capital budget of greater dimensions than in recent years, which will benefit the heavy-construction sector.

* Building and repairing roads and construction related to the mining industry will be the types of project offering the greatest dollar value in the construction industry overall.

Capital Budget Hopes. The capital budget of Gov. Walter Hickel has buoyed the hopes of heavy construction company managers. According to West, the previous administration had no interest in capital construction, such as roads. "Cowper didn't think it was valuable," says West.

Bill Schneider, vice president of Anchorage Sand and Gravel and a former executive director of Associated General Contractors of Alaska, agrees: "We're optimistic that the Hickel administration will be placing a higher priority on building and highway construction than the previous administration did."

On the other hand, no one expects the capital budget to resolve the chronic volatility of the construction industry overall. Noting that state capital spending plans have been "all over the map," Davis Constructors' Romack says that even in the era of plentiful dollars, running a stable and profitable business on the basis of erratic capital budgets can be a nerve-grinding proposition.

"I don't have infinite bonding or financial capability. I feel like I'm in a void as far as data for making decisions," says Romack of dealing with the business climate engendered by state project spending. The company president feels the industry would be better off if the state exercised some political will and steadied the state's wildly swinging...