ANCHORAGE — A newly released report from the University of Alaska projects a significant drop in state spending this year on the construction industry.
The annual report from the university’s Institute of Social and Economic Research presented to the Associated General Contractors of Alaska and the Construction Industry Progress Fund says construction spending in 2016 is expected to drop 18 percent from last year to $7.3 billion, The Alaska Dispatch News reported.
The report also shows that oil and gas construction spending, which hit a record-high last year at $4.2 billion, could decline about 25 percent. The expected decline in that sector is also connected to the completion of several projects. All other types of construction spending are predicted to decline 11 percent overall.
The expected decline in spending on Alaska’s third-largest industry is largely due to the drop in oil prices over the last 18 months, the report stated, “after the previous period of unprecedented high prices a few years earlier.”
A recent decline in state funding for new capital projects this year will also cause construction spending to go down “in many communities like Juneau, Kodiak, and Fairbanks (excluding Eielson Air Force Base),” according to the report.
Public construction spending is set to decline 6 percent, while private spending is expected to drop 24 percent. Spending for national defense construction and basic private spending are predicted to increase by 27 percent and 39 percent, respectively. The basic private industries include tourism, seafood, air cargo and timber.
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Information from: Alaska Dispatch News, http://www.adn.com
