ISER report offers predictions for construction activity this year

by Kathleen McCoy  |   

The Anchorage Daily News printed an article by Elizabeth Bluemink titled "Construction spending is expected to decline" on Feb. 12 based on a recent report from UAA's Institute of Social and Economic Research (ISER).

Bluemink wrote, "Alaska's key construction industry is expecting less spending again this year, continuing a gradual decline that began before the national recession started."

Despite the predicted 3 percent decline in spending this year, the total value of construction activity is likely to total about $7 billion in roads, hospitals, schools, houses and other projects, according to a recent report from researchers at the Institute of Social and Economic Research at the University of Alaska Anchorage.

The construction industry has a lot of moving pieces, and some of them, like road building, remain in decent shape while others, like railroad projects, are getting battered.

The overall decline of the past few years is mostly due to a decline in home-building activity and commercial building projects, according to a review of ISER data from the past few years.

"If you are a dirt contractor (working on road projects), it's a good time to be in business. If you are a building contractor, we've seen a steady decline in that work in the last few years, and it will decline more," said John MacKinnon of the Associated General Contractors of Alaska, which commissions the annual ISER report.

He worried about some of the spending declines in individual sectors but feels the overall spending level on construction isn't horrible. "It's flat. In this economy, flat is real good," he said.

As a young state that's still building itself, Alaska's construction industry touches every other industry, from oil to tourism to retailing, and has long been a source of abundant, well-paying jobs.

But the number of people employed in the industry moves up and down with the availability of funding.

In recent years, construction employment peaked at about 18,600 jobs in 2005, averaged over the entire year. By last year, employment had dipped to about 16,500 -- still about one in every 20 jobs in the state."

The full article can be read here.

A PDF of the full ISER report can be downloaded here.

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