Residential: $225 Million
TWe expect the pace of commercial con- struction will slow again this year, primar-
ily because of weakness in the economy.
That weakness is reflected in the continued
decline in employment (forecast at 0.5 per-
cent for 2018), more people leaving Alaska
than moving in, and flat personal income.
Also compounding the situation is uncer-
tainty about the state government’s ability to
successfully deal with the deficit. One large
project currently under development is a new
$40 million warehouse for Odom, near the
airport in Anchorage.
In spite of the Alaska recession, the residential market is relatively healthy, as measured
by prices and loan activity. Part of that is because less new stock has been added to the
market in the last several years. Due to the
continued drop in employment and out-mi-gration of population, we expect residential
construction this year to again be lower than
last year. Projects with public funding will be
less sensitive to these economic trends.
The strongest market will continue to be
the Mat-Su Borough, since it is the only area
continuing to see population growth.
An increase in population is anticipated
for the Fairbanks area, associated with the
deployment of two F- 35 squadrons to Eielson
Air Force Base, but deployment will not begin until the end of the year. In addition, potential private housing developers are adopting a cautious investment approach, in part
due to recent Congressional attempts to close
The changing composition of the population is affecting the demand for housing as
well. Growth of both the senior and millennial populations is increasing the demand for
smaller housing units.
Publicly Financed Construction
National Defense: $630 Million
Defense spending will again be higher in
2018, fueled by spending for infrastructure
for the F- 35 bed-down and the Missile Defense System.
Most of the Corps of Engineers budget for
MILCON (military spending for facilities on
bases) will be allocated toward these two ac-
tivities. The F- 35 bed-down involves several
large projects totaling about $500 million,
construction of many of which will get un-
derway this year. With ongoing projects, this
is likely to be the biggest year for work at Eiel-
son Air Force Base near Fairbanks, where the
F-35s will be located.
Missile defense work will be split between
two sites at Fort Greely and Clear. Fort Greely
is where the Mission Control Facility is under
construction. Clear is where the Long-Range
Discriminant Radar facility will be located.
Congress recently approved the addition of
another field of missile silos at Fort Greely,
but that will not be under construction for
MILCON spending also includes sustainment, restoration, and modernization work
at all the military bases.
Dalton Highway Reconstruction MP 401-414.
Glenn Highway Chickaloon Bridge replacement.
Image by Hamilton Construction Alaska Co.