Total construction spending in Alaska will be about $7.3 billion in 2016, down 18% from last year’s $8.9 billion. That drop can be traced to the recent steep decline in oil prices, after several years of very high prices. Those high oil prices had stimulated construction spending throughout the state economy, especially in the oil and gas sector and in state government. Those are among the findings of the new 2016 Construction Spending Forecast, prepared by Scott Goldsmith and Pamela Cravez of ISER for the Associated General Contractors of Alaska.
Many sectors of the economy will see drops in construction spending, particularly the oil and gas sector, which had record spending in 2015. But spending in some sectors will be up or the same as last year. Spending for national defense projects will be up 27%, and spending by basic industries other than oil and gas (tourism, seafood, air cargo, and timber) will be up 39%. Spending for highways and roads will be the same as in 2015, as will spending by the mining industry.