Official: Construction activity slows down statewide

Work on roads, bridges, airports same as last year

Posted: Wednesday, July 29, 2009

ANCHORAGE - Overall construction in Alaska is down an estimated 10 percent statewide this summer from the same time last year, an industry official said Tuesday.

Rob Stapleton / Alaska Journal Of Commerce
Rob Stapleton / Alaska Journal Of Commerce

The slowdown rate for building construction is even steeper - between 20 percent and 30 percent, said John McKinnon, the executive director of the Associated General Contractors of Alaska.

But construction on roads, bridges, airports appears to be about the same as last year, and the federal stimulus package is expected to keep work continuing this year and into next year.

The state has received the necessary approvals for about $95 million, easily meeting the targets for quick action in the federal stimulus bill, said Jeff Ottesen, a senior state Department of Transportation and Public Facilities manager.

McKinnon's estimate of a slower season is backed up by the latest state Department of Labor data on employment, which shows a dip in construction employment of about 1,100 workers in June, the latest month in which data is available, compared with June of 2008.

The preliminary June figure showed 18,700 at work in the building industry, according to state labor economist Neal Fried. The trend is consistent with May construction work force data, which is confirmed.

There is some good news. People who have money to build things this year could find that contractors' bid prices are down, in some cases sharply. The lower bids reflect sharp drops in the cost of materials and fuel compared to last year, when prices for everything contractors have to buy seemed to skyrocket.

The picture isn't so good for new buildings, however. Last spring, the Legislature did not fund construction of a $90 million new state crime laboratory, given the tight state revenue situation, and also rejected starting work on a new biological sciences building on the University of Alaska Fairbanks campus.

Private construction, mostly for commercial facilities, is in a slump compared to previous years, when there was a rush of construction of "big box" retail stores and hotels.

"The retail story has ended," Fried said.

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