Federal and state budget cuts will take a bite out of next year’s construction season, but the annual Alaska construction forecast still calls for spending to rise by 8 percent this summer.

In Kodiak, public spending on large projects will continue to keep the local construction industry in high gear.

According to the annual report compiled by the University of Alaska’s Institute of Social and Economic Research, infrastructure spending will buoy public-sector construction despite federal sequestration and state austerity measures.

In the private sector, a 13 percent rise in oil and gas spending — by far the largest portion of the state’s construction budget — will counter declines in health care construction.

According to the report, construction spending will rise to $8.4 billion overall, up from $7.8 billion last year.

The report was written before sequestration became official and cautions, “There is some downside risk to the forecast this year.”

Oil and gas spending is reliant upon good weather and high fuel prices, and the report cautions that regulatory hurdles may also prevent development.

The impact of sequestration on public-sector construction, meanwhile, likely will not become apparent until 2014 and later. Projects beginning this summer have their funding already approved because of the time needed to draft plans and arrange for construction.

In Kodiak, those public-sector projects include the new borough-owned nursing home, the Kodiak High School expansion and renovation project and dredging of the St. Paul Harbor entrance.

Kodiak Island Housing Authority is expected to break ground this summer on a senior housing complex on Near Island, and Alutiiq Corp. will begin a series of construction projects at the Naval Special Warfare Center on Spruce Cape.

While the repaving of Kodiak State Airport has wrapped up, work will soon begin on an FAA-mandated safety overhaul that will require construction into Chiniak Bay.

That project, and construction of a new city Pier 3, is not expected to begin until 2014.

Construction projects entering a second year include the new Kodiak Public Library and the Afognak Native Corporation building on Near Island.

Statewide, construction employs 16,500 Alaskans, making it the second-largest industry after oil and gas exploration. In Kodiak, construction is the second-largest contributor to the area’s economy, just behind the fishing industry.

Contact the Mirror at editor@kodiakdailymirror.com.

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