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Alaska construction firms more pessimistic than those elsewhere

  • Author: Annie Zak
  • Updated: June 23, 2016
  • Published January 11, 2016

Construction firms in Alaska have mixed expectations about how the year ahead will treat their industry, though their outlook is somewhat grim when it comes to how much work they expect to be available in 2016.

That's one takeaway from a new survey about Alaska's construction industry this year. The data reflect the opinions of contractors about the future, not a report of actual activity.

The trade group Associated General Contractors of America and software company Sage conducted the survey across the United States. The Alaska study surveyed 25 contractors -- primarily in the commercial sector -- who listed Alaska as the state where their firms perform the largest amount of their work.

Forty-four percent of the contractors predict they will be competing for less project money in 2016 than last year. The other 56 percent think the amount of project money will be stagnant.

"That's not a particularly optimistic outlook," said Brian Turmail, senior executive director of public affairs for AGC of America. "Contractors in Alaska seem a lot more pessimistic about 2016 than anywhere else in the country."

In fact, Alaska was the only state surveyed -- of the 30 with large enough sample sizes to draw conclusions -- in which none of the contractors expect to see an increase of money for overall projects this year.

An economic trends report released Thursday from the Alaska Department of Labor & Workforce Development forecast that in 2016, the state's construction industry will lose 900 jobs. That's due to low oil prices and a tapering off of both privately and publicly funded construction projects amid economic uncertainty and a tightening of the state's capital budget.

John MacKinnon, executive director of Associated General Contractors of Alaska, said the survey shows that contractors here seem to be expecting a downturn.

One of his biggest concerns continues to be the lack of skilled workers entering the industry, but overall said he thinks the report is "neutral but cautious."

Nearly 30 percent of contractors said they have a hard time filling jobs for both salaried and craft workers, and 28 percent said worker shortages are their biggest concern.

Thirty-five percent of contractors expect an increase in employees of between 1 and 25 percent, but 18 percent expect their employment will drop and 47 percent anticipate no change.

Joe Beedle, chairman of Northrim Bank, found the answers to be a relief because contractors in Alaska said they aren't planning less worker training. Compared to 2015, 24 percent expect their investment in training and development to increase this year, and 71 percent expect it to stay the same.

Getting a loan from a bank hasn't changed much in recent years for contractors, according to the survey: 100 percent said they've seen no change in bank lending compared to a year ago.

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