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Alaska construction spending expected to increase 10 percent this year

  • Author: Annie Zak
  • Updated: March 3
  • Published March 3

Construction spending in Alaska is projected to increase this year for the second year in a row, another sign of improvement in 2019 for the state’s bruised economy.

The value of "on the street” construction spending is expected to be $7.2 billion, up 10 percent compared to 2018, according to a forecast from the Institute of Social and Economic Research at the University of Alaska Anchorage.

That type of spending refers to the level of activity anticipated in 2019, said the report, which was prepared for the Associated General Contractors of Alaska and came out in February. On-the-street spending is different from the measure of new contracts, because those can span more than just one year.

The private sector is expected to account for about $4.4 billion of the total spend for the year, and about $2.6 billion in the public sector, according to the report.

The petroleum industry and national defense are expected to have a 13 percent increase each in construction spending.

Mining will also see an increase expected at 18 percent, to about $265 million, due to mine expansion projects. Growth in other industries is projected to be more modest.

“Spending will be cautious elsewhere as the economy continues to recover from the recession,” the report said, and the state’s $1.6 billion budget deficit is another factor that could contribute to that caution.

A preliminary estimate included in the report shows construction spending related to repairing damage from the Nov. 30 earthquake is expected to be about $200 million.

Statewide, the construction industry is expected to see 5.8 percent job growth this year, according to the Alaska Department of Labor and Workforce Development. That’s more growth than is projected in any other category.

Recent discoveries on the North Slope are one factor behind the expected rise in petroleum construction spending, the report said.

Military base projects near Fairbanks — missile defense work at Clear Air Force Station and Fort Greely, plus plans for the arrival of F-35 jets at Eielson Air Force Base — are driving the increase on national defense construction spending.

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