2006 construction


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SBS Gift Cards make shopping for that handyman easy!	Alaska’s Construction Industry Is Expected To Be Vibrant Through 2006 Construction continues to be one of the bright spots in Alaska’s economy, contributing more than $6.5 billion to the state’s economy or nearly 20 percent of the gross state product. Strength and growth within the industry is expected to maintain pace through the end of 2006 and is expected to see a 13 percent increase in construction spending over 2005. The prediction of sustained growth comes from the University of Alaska Anchorage (UAA) Institute of Social and Economic Research (ISER) annual forecast on construction budgets. According to the forecast, an estimated $6.6 billion will be spent by years end, up from $5.8 billion in 2005. Nearly every sector reviewed in the study – private building, oil and gas, mining, residential and commercial construction, utilities, public building, transportation, education, federal and national defense – is expected to see increases in spending this year compared to last. This is the third year that the Construction Industry Progress Fund and Associated General Contractors of Alaska (AGC) have published the “Alaska Construction Spending Forecast,” which is a review and an estimate of construction activity in the coming years. A total of $715 million is forecasted to be spent on residential construction statewide, slightly up from 2005. The exact figures are hard to pinpoint, however, because some key areas, such as the Mat-Su Valley, don’t keep accurate figures on permits or spending. In general, residential activity is expected to be up on the Kenai Peninsula, in Juneau and throughout the Mat-Su Borough, while Anchorage and Fairbanks are expected to remain flat or slightly down. Residential building has been climbing steadily since 1992, fueled by record lows in interest rates. The majority of that growth occurred between 2001 and 2005. The annual number of new housing units in Alaska increased from 1,704 in 1992 to 4,709 in 2005. Meanwhile, commercial spending is predicted to see a 20 percent jump, to about $300 million, with much of the increase coming from large projects in the Anchorage area. A new convention center, several large office buildings, cargo terminals and rental car facilities at the airport will lead the way to a strong commercial construction year. Additions at Providence Alaska Medical Center, and at hospitals in Fairbanks, Juneau and Kenai will keep contractors busy, but not enough to make up for the huge increases in work while the Mat-Su Regional Medical Center was under construction in 2004 and 2005. Transportation spending is anticipated to be up 7 percent from last year, with the majority from federal highway funds. About $90 million is expected to be spent at the Anchorage and Fairbanks airports and another $40 million will go to renovations and upgrades at the Port of Anchorage. The Alaska Railroad capital construction program anticipated spending more than $75 million for modernization and upgrades to the railroad infrastructure in 2006. Education spending is expected to more than double this year to $310 million, with two-thirds going to statewide schools. Meanwhile, the Denali Commission will be responsible for nearly $100 million in spending on energy projects and health care facilities. Rural sanitation projects also will be responsible for $100 million in spending while federally funded projects are predicted to grow 23 percent to about $400 million. Construction activity, which is measured by total spending, jobs, payroll or gross product, has been growing in Alaska for more than a decade now. This trend has largely been driven by growing federal capital grants and large federal agency capital budgets that, in turn, give a boost to residential, commercial and private infrastructure spending. The ISER study concludes that construction spending is one of the most important contributors to overall economic activity in Alaska, supporting not only the industry itself, but also construction activity in other “hidden” sectors such as oil and gas and mining. Construction spending also impacts materials suppliers, equipment purchase and leasing businesses, design and administration and construction finance and management sectors.

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Alaska’s Construction Industry Is Expected
To Be Vibrant Through 2006

Construction continues to be one of the bright spots in Alaska’s economy, contributing more than $6.5 billion to the state’s economy or nearly 20 percent of the gross state product. Strength and growth within the industry is expected to maintain pace through the end of 2006 and is expected to see a 13 percent increase in construction spending over 2005.

The prediction of sustained growth comes from the University of Alaska Anchorage (UAA) Institute of Social and Economic Research (ISER) annual forecast on construction budgets. According to the forecast, an estimated $6.6 billion will be spent by years end, up from $5.8 billion in 2005. Nearly every sector reviewed in the study – private building, oil and gas, mining, residential and commercial construction, utilities, public building, transportation, education, federal and national defense – is expected to see increases in spending this year compared to last. This is the third year that the Construction Industry Progress Fund and Associated General Contractors of Alaska (AGC) have published the “Alaska Construction Spending Forecast,” which is a review and an estimate of construction activity in the coming years.

A total of $715 million is forecasted to be spent on residential construction statewide, slightly up from 2005. The exact figures are hard to pinpoint, however, because some key areas, such as the Mat-Su Valley, don’t keep accurate figures on permits or spending. In general, residential activity is expected to be up on the Kenai Peninsula, in Juneau and throughout the Mat-Su Borough, while Anchorage and Fairbanks are expected to remain flat or slightly down. Residential building has been climbing steadily since 1992, fueled by record lows in interest rates. The majority of that growth occurred between 2001 and 2005. The annual number of new housing units in Alaska increased from 1,704 in 1992 to 4,709 in 2005.

Meanwhile, commercial spending is predicted to see a 20 percent jump, to about $300 million, with much of the increase coming from large projects in the Anchorage area. A new convention center, several large office buildings, cargo terminals and rental car facilities at the airport will lead the way to a strong commercial construction year. Additions at Providence Alaska Medical Center, and at hospitals in Fairbanks, Juneau and Kenai will keep contractors busy, but not enough to make up for the huge increases in work while the Mat-Su Regional Medical Center was under construction in 2004 and 2005.

Transportation spending is anticipated to be up 7 percent from last year, with the majority from federal highway funds. About $90 million is expected to be spent at the Anchorage and Fairbanks airports and another $40 million will go to renovations and upgrades at the Port of Anchorage. The Alaska Railroad capital construction program anticipated spending more than $75 million for modernization and upgrades to the railroad infrastructure in 2006.

Education spending is expected to more than double this year to $310 million, with two-thirds going to statewide schools. Meanwhile, the Denali Commission will be responsible for nearly $100 million in spending on energy projects and health care facilities. Rural sanitation projects also will be responsible for $100 million in spending while federally funded projects are predicted to grow 23 percent to about $400 million.

Construction activity, which is measured by total spending, jobs, payroll or gross product, has been growing in Alaska for more than a decade now. This trend has largely been driven by growing federal capital grants and large federal agency capital budgets that, in turn, give a boost to residential, commercial and private infrastructure spending.

The ISER study concludes that construction spending is one of the most important contributors to overall economic activity in Alaska, supporting not only the industry itself, but also construction activity in other “hidden” sectors such as oil and gas and mining. Construction spending also impacts materials suppliers, equipment purchase and leasing businesses, design and administration and construction finance and management sectors.