2010 construction spending forecast: oil is flat, construction is flat, but that's still good news for Alaska.

• Author: Cutler, Debbie
• Position: CONSTRUCTION

Here's a quick quiz.

What industry is the third largest in the state?

What industry pays the second highest wages in Alaska?

What industry employs about 21,000 workers, has a payroll of more than $1 billion and accounts for 20 percent of Alaska's economy: about $7 billion?

If you said the construction industry, you are correct.

Despite projected spending down 5 percent in public construction and down 1 percent in private-sector construction (down 3 percent total), the industry is still vital to Alaska and the people who live here. Total Alaska construction spending for 2010 is forecasted to be, as stated before, $7 billion, with $4.4 billion of that coming from the private sector and $2.6 billion from the public sector (see chart at right).

That's a big wow for Alaska.

So WHO'S THE BIG SPENDER?

Oil and gas will make up the bulk of 2010 construction spending, more than $3 billion, no change over previous years. That's 43 percent of all construction spending this year. According to Alaska's Construction Spending 2010 Forecast, from which much of the information in this article is gleaned, "None of the three major producers on the North Slope--BP, ConocoPhillips and Exxon--will be exploring."

Spending, the report added, "will be concentrated on bringing Liberty Field into production, developing existing reserves and maintaining infrastructure." ConocoPhillips also will concentrate on Alpine West and Exxon on Point Thomson. Other companies will have large budgets on the North Slope, mainly ENI, Pioneer and Shell, the report stated.

The report was put together by Scott Goldsmith and Mary Killorin of the Institute of Social and Economic Research (ISER) at the University of Alaska Anchorage for the Construction Industry Progress Fund and the Associated General Contractors of Alaska. It is distributed statewide to AGC members, banks, government offices, legislative offices, AGC clients and through ISER and AGC, both online and at their offices, said John MacKinnon, executive director of the AGC. The report has a press run of about 6,500, he added.

ANY SURPRISES THIS YEAR?

According to Scott Goldsmith, the 2010 Forecast did hold a surprise or two, mainly how well Alaska is doing despite the economic downturn in the Lower 48 and a cautious spending environment in Alaska.

"Based on my observation of the Alaska economy, I thought (2010 construction) wouldn't be nearly as strong as it turned out to be," he said. "But I think there are a couple things...