Construction Decline in Alaska Predicted Without Quake Projects

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An Alaska industry group predicted a decrease in 2020 construction spending due to a lower number of earthquake repair projects.

The Associated General Contractors of Alaska forecast a decline in construction spending this year of $500 million, or about 6.9%, The Alaska Journal of Commerce reported.

The organization’s annual spending forecast released Thursday was compiled by Alaska research firm McDowell Group.

The projected loss is largely due to a dwindling number of repair projects stemming from the 7.1 magnitude earthquake that struck southern Alaska in November 2018, AGC Executive Director Alicia Siira said.

The Anchorage and Matanuska-Susitna school districts are still working on long-term rehabilitation of several schools damaged by the earthquake, but the majority of repairs to roads and private buildings have been completed, the report said.

Last year’s forecast for $7.2 billion of construction spending attributed about $200 million in government spending to projects related to earthquake recovery, with additional spending related to private-sector repairs.

While other sectors of the industry are expected to see mostly flat spending, there are some positive estimates, Siira said.

“Although the outlook is relatively flat, there are certainly some bright spots for construction. Overall, petroleum, oil and gas spending is still a bright spot; we’re seeing lots of activity up there. Mining is still going to be a big one, as well,” she said.

Oil industry spending is expected to reach $2.9 billion in capital investments, which is a nearly $200 million year-over-year increase, the report said.

Mining companies are expected to spend about $170 million on capital projects this year, which would be about $100 million less than 2019, the report said.