2008 Alaska's Construction Spending Forecast

Abstract

Total construction spending “on the street” in Alaska in 2008 will be $7.01 billion, down 2% from last year. Excluding the oil and gas sector—which accounts for 41% of the total—construction spending will be down for the second year in a row, falling 6% to $4.12 billion. Last year it declined 3%. Lower construction spending, combined with higher material and labor costs, will result in a modest reduction in the level of construction employment in 2008. Although this will be the second year of decline in construction employment, it remains well above the long-term trend. Construction costs continue to rise faster than the general rate of inflation—and that trend is expected to continue, further reducing the purchasing power of each construction dollar. Private-sector construction spending is projected to be $4.64 billion in 2008, an increase of 2% over 2007. Strong growth is expected in oil and gas, mining, utilities, and the other basic sectors.