be higher than last year, as the industry
worldwide continues to rebound from several years of low activity.
Spending by the six major mines currently
in operation will be about the same as last
year as producers make new investments to
increase efficiency and to develop new reserves to extend mine life. For example, Teck
Cominco, buoyed by the rise in the price of
zinc, is exploring a new deposit at the Red
Dog mine, one of the world’s largest zinc
Spending for drilling and other site work
will be higher this year at the several large
prospects under various stages of development, including the upper Kobuk mineral
prospect and the Bokan rare-metals prospect in Southeast. The three largest prospects
(Donlin Creek, Pebble, and Livengood) are
still in various stages of pre-construction
Spending on other prospects will be higher
this year, thanks to an improved outlook in
the mining industry worldwide.
Other Basic Industries: $110 Million
Alaska’s other important basic industries—
tourism, seafood, air cargo, and timber—are
generally healthy and expanding. As a result,
their spending on construction will be higher this year.
Spending on new hotels, including several in Anchorage, will be in response to the
continued growth in the number of tourists
visiting the state, although the boom in construction may be winding down.
At least two replacement or expansion seafood processing plants have been announced
for this year for Southwest Alaska. Several
infrastructure improvements will also be
made to deal with problems stemming from
the unexpected huge salmon runs in 2017.
Alaska Airlines will continue its $100
million program, upgrading its terminal facilities throughout the state and completing
construction of its new hangar in Anchorage.
Utilities: $539 Million6
Utility spending will be up slightly this year.
Although there are no new large projects
anticipated for the major electric utilities,
they continue to spend on maintenance and
upgrades of existing facilities. GVEA (
Golden Valley Electric Association) is finishing up
work on its Healy 2 unit.
Utility spending on renewable-energy
projects continues. Upgrades to the Terror
Lake project in Kodiak and Bradley Lake are
ongoing, but the expansion of the Fire Island wind farm near Anchorage is on hold.
Other smaller projects around the state are
still funded by the state Renewable Energy
Fund, but no new money is being added to
No significant expenditure related to gas
utilities is projected as development of the
gas distribution system for Fairbanks awaits
a final financing plan from AIDEA.
Telecommunications spending will be a
little higher this year, as firms make expenditures to improve the quality of service. This
sector’s spending in Alaska benefits from
funds generated by the Universal Service
Funds, which channel revenues collected
from services provided in other locations to
help pay for needs in Alaska.
Hospitals & Healthcare: $275 million
Hospitals and healthcare facilities will continue to spend on expansions and upgrades
this year but at a slower rate as some large
projects are completed. No new large projects
have been announced for the large public or
private hospitals in the state. Some hospitals are expanding facilities for drug-related
Work is also continuing on the new YKHC
(Yukon Kuskokwim Health Corporation)
hospital and outpatient clinic in Bethel,
which have a total price tag of $287 million.
Healthcare facilities continue to proliferate as the population ages and federal funds
for healthcare grow.
Other Commercial: $125 Million
Commercial construction spending consists
primarily of office buildings, retail space, and
warehousing. 7 The level of spending from
year to year can be influenced by a few large
projects, like an office tower or warehouse,
as well as the current and projected health of
Market indicators like vacancy rates and
turnover are relatively healthy, but the outlook is fragile.
6 Although we include utilities and hospitals/health care spending in private spending, there is a significant amount of public spending for some projects in these categories.
7 Our commercial construction figure is not comparable to the published value of commercial building permits reported by Anchorage and other communities. Municipal reports of the
value of construction permits may include government-funded construction, which we capture elsewhere in this report. We have also excluded hospitals, utilities, and hotels, from commercial construction, so we can provide more detail about those types of spending.
Alaska Regional Hospital Imaging suite improvement.
Fairbanks Memorial Hospital surgery room.
Image by GHEMM Company