Economists think the building industry will recover in late 2011
POSTED: 1:30 a.m. HST, Nov 29, 2010
Depressed construction activity in Honolulu continues to keep prices in check for builders, according to a new survey.
Construction industry consultancy firm Rider Levett Bucknall said construction costs for Oahu were nearly unchanged in the July-to-September period from the prior three months.
Costs for construction in Honolulu have been flat for all of this year, after declining last year from a peak that occurred about October 2008, the Rider report said.
The flat construction costs for Honolulu were in line with 12 other major cities in the survey, which said the average industry costs for 13 cities barely moved, rising 0.01 percent. Honolulu's cost was up 0.02 percent.
Rider said a painful shortage of new construction projects nationally has kept prices from moving much.
Economists observing the construction industry generally expect the industry to begin recovering in the third quarter of 2011, with activity depending largely on whether housing markets and the national economy recover, the report said.
Rider said there is some hope that private developers in Hawaii will feel confident to move forward with projects early next year, and that government projects will also increase.
Future construction prices are expected to remain favorable, though some inflation is forecast from slow increases in labor and material costs, the Rider report said.
The report is based on surveys in 13 cities, including New York, Las Vegas, San Francisco and Washington.
According to nationwide construction spending reported by the U.S. Department of Commerce, activity this year is estimated at $811.8 billion based on August spending seasonally adjusted to an annual rate. The figure is 10 percent below spending at the same point last year.