Hawaii island’s struggling construction sector is poised to get a lift from the development of a new telescope on Mauna Kea that also will provide a substantial number of high-tech jobs when it begins operating in 2018, according to an economic forecast by local economist Leroy Laney.

The economic recovery on Hawaii island has thus far been largely limited to the visitor industry, which has seen significant gains in both arrivals and spending, Laney told business leaders in Hilo and Kona Thursday in presentations sponsored by First Hawaiian Bank.

The construction industry, meanwhile, continues to be hampered by relatively low residential real estate prices that make it more attractive to buy an existing home than build a new one, said Laney, a professor of economics and finance at Hawaii Pacific University.

Construction employment is expected to begin improving, however, once work starts on the so-called Thirty Meter Telescope that received approval in February from the Board of Land and Natural Resources.

"It is hard to overestimate the importance of the project for overall jobs on the island, the construction industry, UH-Hilo base facilities and the image of the island in general," Laney said in remarks prepared for delivery at the presentations.

Construction will extend over most of a decade, with the first scientific applications scheduled for 2018, according to Laney. The facility will have an annual budget of $26 million and a payroll of 140 employees, not including construction workers, he said.

The number of jobs associated with the project could grow to about 500 through 2023, Laney estimated, many of which will require advanced degrees. In the past about 40 percent of observatories’ technical and administrative staff has been recruited from outside the state. That percentage could decline, Laney said, with more local training programs.

A modest increase in Hawaii island building permits last year fueled optimism that the island’s slumping construction industry was poised for a turnaround. Single-family home permits rose by 17 percent over 2009 on a dollar basis as construction activity increased on the Kona Coast, particularly in the high-end Kukio/Hualalai area. In addition, the Department of Hawaiian Home Lands began construction on a 40- to 45-unit single-family home project in the Lai Opua development in Kona. But the market reversed course in 2011."Permit values did not show a good beginning for 2011. West Hawaii saw a big drop in the first quarter, breaking a positive trend, and East and North Hawaii continued to gradually decrease," he said.

In addition to the visitor industry and the Thirty Meter Telescope, another positive indicator for the Hawaii island economy has been the strength of the Natural Energy Laboratory at Keahole Point.

The facility survived the recession without losing any of its 41 tenants. "Its contribution to the economy is important," Laney said, noting that it has about 400 employees and combined tenant revenue of about $50 million.