The 2012 building forecast: Alaska's construction spending.

• Author: Storm, Gene
• Position: Special section: Building Alaska

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As the summer construction season unfolds across Alaska, activity on the ground takes shape almost as predictably as the spring blossoms coaxed to life by the changing season. In what has become the industry's annual rite of spring, "Alaska's Construction Spending--2012 Forecast" attaches numbers to that activity on the ground, providing the big picture of where the spending will occur. This year, the overall value of construction spending "on the street" will be $7.7 billion, an increase of 3 percent over 2011.

The 2012 forecast is the ninth annual edition produced for the Construction Industry Progress Fund and the Associated General Contractors of Alaska. Scott Goldsmith and Mary Killoran of the Institute of Social and Economic Research at the University of Alaska Anchorage wrote the report. Northrim Bank was the underwriter.

The forecast foresees increases in construction spending both in and out of the oil and gas sector. Oil and gas spending is pegged at $3.2 billion, an increase of 1 percent over 2011. Construction in other sectors will account for $4.6 billion, up 4 percent over 2011.

Construction industry wage and salary employment, according to the report, will remain at stable at 15,800. That represents a decline from the peak of 18,300 recorded in 2005.

The report examines private and public spending by category and identifies some winners and losers in terms of the dollars that will reach the street. The largest private sector increase will be in the utility category at 29 percent, a spending level of an estimated $794 million. The caveat is that public funds support some of the projects in this category, as is the case in some health category spending, which will increase by 7 percent to $325 million.

The utility category includes spending on electric power generation, transmission and distribution, telecommunications, and natural gas transmission and distribution. Work on a new gas-fired power plant shared by Anchorage Municipal Light and Power and Chugach Electric contributes to the increase as do expansion and upgrade projects at utilities along the Railbelt to the south. Work on the long-anticipated Fire Island wind farm in Cook Inlet will begin this year.

Mining is another category that will experience increased spending this year, up 11 percent over last year at $340 million. Driven by high metal prices worldwide, the mining industry will spend more on exploration and development as well as...