Lethargic economic growth forecast for Kauai

With the exception of strength in the visitor industry, economic growth on Kauai is expected to remain sluggish in the coming months, according to a forecast released Tuesday by the Kauai County Office of Economic Development.

Continued weakness is expected in home construction and sales as well as the job market, the report said.

"Kauai’s economy is still moving mostly sideways," said Ken Stokes, a private economist with research firm Island Matters LLC who prepares the quarterly economic report for the county. "There are very few signs that the mostly flat trends we are seeing will rebound in the quarters just ahead."

Building permits for new home construction are forecast to fall by 96 percent in the second quarter from the same period a year earlier. That follows year-over-year declines of 51 percent in the first quarter and 44 percent in the fourth quarter last year.

The value of home sales on Kauai is expected to decline to $37.3 million in the second quarter, down 15 percent from the second quarter of 2011. Home sales fell by 20 percent in the first quarter and 25 percent in the fourth quarter of 2011.

Payroll jobs are expected to remain virtually unchanged at 26,900 in the second quarter from the same quarter last year. The job count is one of four economic indicators that are at about the same level as they were in 2003, Stokes said. The others are income, spending and electricity purchases, which are "well below the boom years of 2006-2007," he said.

One area helping buoy the Kauai economy over the past year has been the island’s visitor market. That is expected to grow, with the average daily visitor count rising to 24,400 in the second quarter, a 15 percent increase over year-ago numbers. Visitor spending per person is expected to rise to $176.12 a day in the second quarter from about $157 during the same period a year earlier.

The average length of stay for visitors is forecast to rise to 7.8 days in the second quarter, a 1.5 percent increase over the same period in 2011.