Quantcast

Wednesday, July 23, 2014         

 Print   Email   Comment | View 3 Comments   Most Popular   Save   Post   Retweet

Construction industry will rebound in 2013, UH report forecasts

Judging by permits, building will increase even if rail is stalled, economists predict

By Alan Yonan Jr.

POSTED:



Hawaii's construction sector is on track to begin its long-awaited recovery next year even if Oahu's rail project remains sidelined, according to a quarterly forecast to be released today by the University of Hawaii Economic Research Organization.

The number of permits sought for private construction suggests that commercial and residential building will offset some of the lost rail activity, although Hono­lulu will still be adversely affected, according to the report.

"Despite rail challenges we continue to expect construction to begin a decisive move upward in 2013," the report's authors wrote.

Workers discovered human bone fragments in September along the proposed rail route in Kakaako. That was followed by a Hawaii Supreme Court ruling requiring the City and County of Hono­lulu to survey the entire 20-mile rail route before proceeding with construction.

"We have pushed back our forecast for rail work by one year compared with our previous estimate. And of course we await the outcome of November's mayoral election, which could affect rail prospects beyond that," the UHERO report said.

UHERO is calling for the overall economy to continue on its path of slow, steady growth with moderate gains in payroll jobs. Researchers revised downward slightly their estimates of job and income growth compared with their previous forecast issued in July.

Inflation adjusted gross domestic product, the broadest measure of the state's economic activity, is forecast to grow by 0.9 percent in 2012 and 2.5 percent in 2013.

Statewide private building permits have expanded for three consecutive quarters this year, the first time that has happened since 2006, the report said. Residential building permits are up 20 percent from last year, and firming real estate prices on Oahu support UHERO's view that the next home-building cycle is getting under way, according to the report.

UHERO is forecasting construction jobs to grow by 0.6 percent this year and 7.7 percent in 2013. The 2012 increase would be the first annual gain in construction jobs since 2007.

The biggest risk to the economic forecast is at the federal level, where failure to address a looming fiscal crisis could derail the economy, the report said.

A confluence of expiring tax cuts, new taxes and automatic spending cuts agreed to last year have been dubbed "the fiscal cliff."

"So far, political posturing has prevented a solution; let's hope cooler heads prevail in the post-election period," the report said.

ECONOMIC OUTLOOK
Year-over-year percentage changes
  2011 2012 2013 2014
Visitor arrivals 3.7% 9.1% 3.6% 1.9%
Payroll jobs 0.9% 1.1% 2.2% 2.4%
Unemployment rate* 6.7% 6.3% 5.6% 5.0%
Inflation rate 3.7% 2.6% 2.3% 3.1%
Personal income** 1.9% 1.2% 2.3% 2.8%
Gross domestic product** -1.5% 0.9% 2.5% 3.3%
*Percentage of workforce
**Adjusted for inflation
Source: University of Hawaii Economic Research Organization






 Print   Email   Comment | View 3 Comments   Most Popular   Save   Post   Retweet

COMMENTS
(3)
You must be subscribed to participate in discussions
By participating in online discussions you acknowledge that you have agreed to the TERMS OF SERVICE. An insightful discussion of ideas and viewpoints is encouraged, but comments must be civil and in good taste, with no personal attacks. Because only subscribers are allowed to comment, we have your personal information and are able to contact you. If your comments are inappropriate, you may receive a warning, and if you persist with such comments you may be banned from posting. To report comments that you believe do not follow our guidelines, email commentfeedback@staradvertiser.com.
Leave a comment

Please login to leave a comment.
islandsun wrote:
Its already rebounded, where have you been?
on November 2,2012 | 04:26PM
niimi wrote:
NO need for rail because there will be plenty of constructions jobs, ALL LOCAL JOBS! That unlike the rail which has 40% mainlanders.
on November 2,2012 | 08:26PM
niimi wrote:
That is why the unions were so impatient and dumb. Here's why. Bring in mainlanders and some end up staying. Then when there's a downturn and there alllllways are downturns in the economy--those new folks are competing with the locals for the fewer jobs. The union bosses seem so shortsighted that the don't seem to care. $3 Million spent by PRP averages out to almost $12,000 per union member. Carpenters union has 243 members, is that correct? Do the math. See how dumb it was of them to waste spending so much money on rail? Now it looks to be all for nothing.
on November 2,2012 | 08:29PM
IN OTHER NEWS
Latest News/Updates