The University of Hawaiʻi Economic Research Organization (UHERO) released its construction forecast for the state.
Last year’s construction gains were smaller than anticipated. Activity will ramp up a bit this year, as Kakaʻako condo building intensifies and new tourism-related projects add to the mix.
The more attenuated schedule of rail building and lagging single-family development will generate a lower and later peak to the current construction cycle.
- Despite the surge in Kakaako condo construction, residential building permits fell last year. Assuming affirmative resolution of ongoing entitlement battles for Hoopili and Koa Ridge, single-family building will begin to pick up over the next two years.
- The non-residential side of the market has been strong. The big surge in activity is probably over, but there will be some additional growth over the next two years.
- Contracting for government construction fell off last year, and, while there are a significant number of large projects in the works, there is no indication of significant additional growth.
- Along with the dearth of new home building, sales of existing homes were also slow last year. UHERO expects price pressures to mount, although low mortgage interest rates will help with affordability.
- The construction cycle has been very stingy with job creation. UHERO expects mid-single-digit job growth for the next several years, bringing construction employment to just over 37,000 workers by 2017.