ALASKA'S CONSTRUCTION INDUSTRY FORECAST UP 18 PERCENT TO $9.2 BILLION
ANCHORAGE, AK. -- Alaska's Construction Economy will be up 18% in 2014 over 2013 according to Scott Goldsmith of the University of Alaska's Institute of Social and Economic Research. In making that big jump, Goldsmith estimates that will be worth $9.2 billion pumped into the Alaska economy for this calendar year. Last year the construction economy was pegged at $8.3 billion.
In the special 8-page report issued for the Construction Industry Progress Fund (CIPF) and the Associated General Contractors of Alaska (AGC) he said, "Finally, the economy has continued to grow, adding jobs and population." The report underwritten by Northrim Bank, and issued for the 11th consecutive year, breaks out both private and public sectors of construction spending. It notes the oil and gas sector will account for nearly half of the total with $4.3 billion. This is $1 billion over the total spending for oil and gas last year.
AGC Executive Director John MacKinnon said, “I believe the catalyst for this growth is an administration and legislature who understand that government needs to be a partner with business. Their actions in the past few years have resulted in a renewal of optimism, not just in the oil sector, but in higher private investment in the residential and commercial construction markets."
There are four major factors for the robust projection for 2014. The largest reason is due to expanded investment plans by the oil and gas industry. Others include a larger Department of Defense budget, a reallocation of unspent federal highway funds, and strong spending by the state government.
Goldsmith notes, "The growth is being driven by continuing high price of oil and the growing need to maintain aging infrastructure and most importantly, the new climate of optimism created by passage of the new production tax on oil and gas that went into effect at the start of 2014."
"The construction industry plays a large role in our business and we are proud to continue to sponsor the Construction Forecast," said Joe Beedle, Northrim Bank President and CEO. "It validates the momentum coming from the governor and legislature in support for a competitive tax structure. The forecast gives us
confidence that Alaska is headed in the right direction."
The construction trade is Alaska's third largest industry paying the second highest wages. Accounting for 20 percent of Alaska's total economy, the construction industry reflects the pulse of the economy.
The report is compiled and written by Scott Goldsmith, Mary Killorin and Linda Leask of the University of Alaska's Institute of Social and Economic Research (ISER).