Mouhcine Guettabi

Assistant Professor of Economics,

Institute of Social and Economic

Research

John MacKinnonExecutive Director, Associated General

Contractors of Alaska

January 29, 2015 Anchorage

January 30, 2015 Fairbanks

2015 Construction Spending: $8.5 BILLION

PRIVATE: NET OIL

AND GAS$1.71 20%

OIL AND GAS$3.84 45%

PUBLIC$2.97 35%

Construction Spending (Billion $)Down 3%

$0

$1

$2

$3

$4

$5

$6

$7

$8

$9

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

OIL AND GAS

PRIVATE: NET OIL AND GAS

PUBLIC

-2%

-13%

+1%

2016 and Beyond

What’s on Everyone’s Mind ?

Average vs Spot Price

Shale Oil Supply

Price Looking Ahead

Construction $$ : 4 Sources

Federal Procurement (DoD) and Grants

State Government

Petroleum Industry

Other

Department of Defense

Big 5 Federal Capital Grants

• Highways• Airports• Safe Water• Health• Housing

Federal Grants to State

2016 and Beyond: Federal $ Stable

MAP-21 Missile Defense F-35

State Construction Appropriations

Total State Capital Appropriation

Time Lag from Appropriation Until “Cash on the Street”

2016 and Beyond: State Capital Spending Tighter

Petroleum: Planned Spending

Petroleum Cash Flow Squeeze

2016 and Beyond: Petroleum Spending--Lots of Potential,

IF???

Each New Barrel Requires More Workers

Economic Growth has SlowedJOB GROWTH

POPULATION GROWTH

2016 and Beyond: Overall Economy--Deceleration

Oil and Gas: North Slope

$ 3,560

+3%

Oil and Gas: Cook Inlet

$ 280

-37%

National Defense

$ 435

+10%

Highways

$ 755

-1%

Airports / Ports / RR

$ 465

+9%

Education

$ 465

-3%

Mining

$ 210

+19%

Utilities

$ 680

-20%

Health Care

$ 240

-

Other Federal

$ 255

-15%

Other State and Local

$ 555

-

Residential

$ 415

-14%

Other Commercial

$ 135

-21%

2015 Stable2016 Uncertain

Thank You!