Maui’s strengthening job market, construction sector and visitor industry have combined to put the Valley Isle economy on a much steeper growth path than its neighbor island competitors, one of the state’s leading economists said Friday.
While tourism has been doing well across the state, Maui has distinguished itself from Kauai and Hawaii island with a much more robust recovery in construction, said Leroy Laney, professor of finance and economics at Hawaii Pacific University, and First Hawaiian Bank economic adviser.
"For the past couple of years, one of the biggest underlying messages about the state economy has been the contrast between the recovering tourism sector and lagging construction. In 2012, for Maui at least, the message is changing," Laney told business leaders gathered at the Maui Beach Hotel for the 38th annual First Hawaiian Bank Economic Forum.
The increase in construction jobs on Maui so far this year has outpaced the growth rate even on Oahu, he said.
Most of the construction is commercial, not residential, so it is mainly larger contractors that are benefiting, according to Laney. Among the bigger projects under construction are Phase II of Alexander & Baldwin’s Maui Business Park, Sempra Energy’s 21-megawatt Auwahi wind energy project and the Mauna Lani Village Center. Other projects contributing to the construction surge are a renovation of the former Renaissance Wailea Beach Resort Maui, the recently completed Courtyard by Marriott Hotel in Kahului, and the second phase of the Kaheawa Wind Farm.
Future projects include the 1,150-home Honualua residential development in Wailea and the Consolidated Car Rental facility at Kahului Airport.
The strength in commercial construction was foreshadowed by an increase in building permits, which were up 350 percent in the first quarter of 2012 from the same period a year earlier. "Any time one sees that kind of surge, it’s probably due to a few major projects," Laney said.
Real estate sales on Maui are beginning to pick up as falling prices and lower mortgage rates have increased affordability. Inventories have fallen by nearly 20 percent over the past year for both single-family homes and condos. Short sales and foreclosures are being absorbed "as the market returns to normal," he said.
Maui’s agricultural sector is benefiting from gains at HC&S, the state’s lone remaining sugar plantation, Laney said. Sugar production at the 35,000-acre plantation has been rising in recent years, and is projected to hit a seven-year high of 180,000 tons in 2012.
