Scott Goldsmith

Construction spending in Alaska this year will be around $6.6 billion, up 4% from last year. But that overall increase is due just to a recovery in spending by the petroleum industry, which is expected to be up about 15%, to nearly $2.6 billion. Without petroleum, overall construction spending in 2018 is likely to be down about 2%, to $4.1 billion.

These estimates are from the newly released 2018 construction forecast, prepared by Scott Goldsmith, professor emeritus of economics at ISER, for the Associated General Contractors of Alaska and the Construction Industry Progress Fund. He has made these forecasts of construction spending every year since 2004.

Download Alaska's 2018 Construction Spending Forecast.

Total construction spending in Alaska will be about $7.3 billion in 2016, down 18% from last year’s $8.9 billion. That drop can be traced to the recent steep decline in oil prices, after several years of very high prices. Those high oil prices had stimulated construction spending throughout the state economy, especially in the oil and gas sector and in state government. Those are among the findings of the new 2016 Construction Spending Forecast, prepared by Scott Goldsmith and Pamela Cravez of ISER for the Associated General Contractors of Alaska.

Many sectors of the economy will see drops in construction spending, particularly the oil and gas sector, which had record spending in 2015. But spending in some sectors will be up or the same as last year. Spending for national defense projects will be up 27%, and spending by basic industries other than oil and gas (tourism, seafood, air cargo, and timber) will be up 39%. Spending for highways and roads will be the same as in 2015, as will spending by the mining industry.

Download the report, 2016 Alaska Construction Spending Forecast (PDF, 1.6MB). If you have questions, get in touch with Scott Goldsmith, professor emeritus of economics, at osgoldsmith@uaa.alaska.edu.

The state government's assets could generate enough earnings in fiscal year 2016 to pay the Permanent Fund dividend, boost the size of the Permanent Fund, and cut the expected General Fund deficit from $3.3 billion to just over $1 billion—which would still be a big fiscal challenge but much more manageable. That's the finding of a new analysis by Scott Goldsmith, professor emeritus of economics at ISER.

Those state assets consist of money in the Permanent Fund and other accounts as well as the value of state-owned petroleum still in the ground. Dr. Goldsmith estimates that after first paying the dividend and adding to the Permanent Fund, the state could put $2.2 billion in remaining earnings in the General Fund, which pays for public services. Right now the state uses only current petroleum revenues and smaller sources to cover General Fund spending—but those revenues are expected to fall $3.3 billion short of the estimated $5.5 billion in spending next year.

Read the analysis, The Path to a Fiscal Future: Use Earnings from All our Assets (PDF, 661.6KB). If you have questions, get in touch with Scott Goldsmith at osgoldsmith@alaska.edu or call 907-786-7720.

ISER publications are solely the work of individual authors and should be attributed to them, not to ISER, the University of Alaska Anchorage, or the research sponsors.

To help people better understand the fiscal challenges Alaska's state government faces, Scott Goldsmith, professor emeritus of economics at ISER, has created an interactive planning model Alaskans and others can download and use to investigate for themselves the implications of different assumptions about state revenues and fiscal policies. Before opening the spreadsheet, users must first "enable macros."

Download the model (Macro-enabled Excel File (.xlsm), 4.54MB)

Last year the Alaska Legislature made a controversial change in the oil production tax, the state’s largest source of oil revenue. The old tax, known as ACES (Alaska’s Clear and Equitable Share), was replaced with MAPA (More Alaska Production Act, or SB21).  Critics and supporters of the change strongly disagree about which tax structure would benefit Alaska the most over time—and in August voters will decide whether they want to keep or repeal the new tax.

Spending for construction in Alaska—including both public and private spending—will be about $9.2 billion in 2014, up 18% from spending in 2013. Increased spending by the oil and gas industry will account for most of the growth in private spending, and a larger Department of Defense budget will lead growth in public spending. State-funded projects will also be a major part of construction spending, with a number of projects that were funded in recent large state capital budgets starting or continuing in 2014. 

Scott Goldsmith, professor emeritus of economics at ISER, has updated his estimate of how much Alaska's state government can afford to spend each year, without risking sudden big budget deficits and economic hardships for Alaskans, as it deals with declining oil revenues. 

Download the paper .

A new report by ISER economists Gunnar Knapp, Mouhcine Guettabi, and Scott Goldsmith assesses the economic importance of the Bristol Bay salmon fishery, the world's most valuable wild salmon fishery. Nearly half the wild sockeye salmon harvested worldwide come from Bristol Bay. The researchers found that as of 2010, Bristol Bay salmon created $1.5 billion in sales value across the United States—through harvesting, processing, and retailing of Bristol Bay salmon—and the additional economic effects of those activities.