On Monday, February 3rd, Associated General Contractors of Alaska testified before both Senate and House Transportation Committees. The “canary in the coal mine” for Alaska’s strong construction industry sounded an alarm – and it was a big one!
Summary:
- At a time of historic, unprecedented levels of federal infrastructure spending, Alaska’s civil(roads, bridges, etc.…)construction contractors are facing a grim 2025 construction season due to the lack of Alaska Department of Transportation (DOT) projects that have been put out to bid.
- Alaska DOT contractors are down 50-90% on their DOT portfolios from the previous year.
- Appropriated funding (not equal to work on the street) for Alaska DOT projects is $200 million lower in fiscal year 2025 from the previous year.
- The delay in finalizing the state’s STIP is having real world impacts on moving projects through the bid pipeline.
- In October of 2024 DOT’s tentative advertising schedule showed 30 projects to bid over the next 4 months. Only 11 of the 30 projects were actually advertised
- The industry undertook a tremendous effort to increase their Alaska workforce, raising numbers back to pre-recession levels.
- Due to the lack of work for FY25, civil contractors are now facing a loss of 1000. high-paying jobs and about $300 million less in work than the previous year.
You can watch the Senate Transportation meeting here and the House Transportation meeting here.
Alaska contractors warn of ‘alarming’ outlook for 2025 road construction season
Sean Macguire, Anchorage Daily News, February 6, 2025
Alaska contractors warned of an “alarming” outlook for the 2025 road construction season in a sharply worded letter sent last week to Gov. Mike Dunleavy.
The summer construction season typically provides a major boost to the state’s economy. But Alaska contractors, engineers and unions say they’re worried that another lean year will see hundreds of jobs lost and critical projects delayed.
The Alaska Department of Transportation and Public Facilities advertises and awards state projects. The department said it is anticipating a “strong” $900 million construction year.
But officials also acknowledge the department is facing myriad challenges to deliver projects. Those include rising costs due to inflation, difficulties in securing American-made materials required under federal law and delays in getting federal grants.
State transportation officials say they are trying to address those issues.
Construction industry groups say they recognize some of the challenges cited by the state. But they’re questioning the state transportation department’s forecast for road construction projects.
Associated General Contractors of Alaska — the industry’s largest trade association — worked with McKinley Research Group to develop its own construction forecast based on the past 15 years of spending. They projected a roughly $600 million road
Alicia Amberg, executive director of AGC of Alaska, told state legislators Tuesday that contractors who work in state road construction are reporting a 50% to 90% decline in their portfolios. She said companies are shedding workers due to a continued drop in projects out to bid.
”We feel like we have to be the canary in the coal mine,” she said.
AGC of Alaska and the American Council of Engineering Companies of Alaska wrote to Dunleavy last week, warning of an “alarming and unprecedented” situation facing the road construction sector.
Both groups urged the governor to take immediate action, including by submitting a supplemental capital budget to the Legislature. They want lawmakers to draw $300 million from the state treasury to “salvage” the 2025 road construction season.
The governor’s office did not respond to a series of questions sent by the Daily News about last week’s letter.
Alaska construction industry veterans say the timing of the road construction shortfall is strange. Billions of federal dollars were expected to come to Alaska from the $1.2 trillion infrastructure bill that Congress approved in 2021. But projects are not being delivered.
”It’s really disappointing because a lot of Alaska’s future and economy depends on a good transportation system,” said former state Transportation Commissioner John MacKinnon, who served nearly three years in the Dunleavy administration.
“We should have so much work going on right now that we can’t handle it,” he saidin an interview last month. “But that’s not happening.”