Growth in construction has spread from Oahu to all four operating counties, providing the expansion that we're no longer getting from tourism, says a new forecast from the University of Hawaii.
The cost of a Hawaiian vacation has risen 40 percent in four years, as lack of hotel room inventory growth has pushed room rates skyward, and that has ended the long growth in tourism, but construction will provide job growth instead, says UHERO, the UH Economic Research Organization.
"Moderate economic expansion will continue," UHERO said Friday. "Tourism weakness continue in the first quarter of this year, and incremental gains for 2014 will be slight (but) the construction industry continues its upturn."
The number of jobs on neighbor islands grew 2.5 percent last year. Job rolls grew 1.6 percent on Oahu despite a 3 percent reduction in government employment. UHERO says Oahu has nevertheless surpassed its 2007 peak while neighbor island employment has not. The forecast is for job growth to continue at more or less the same pace.
Government construction and new condos will drive construction sector growth this year even as solar power installations contribute less to construction activity, UHERO predicts. Independent economist Paul Brewbaker recently noted that solar power installations earlier gave a false sense of broad construction expansion but cause a fraction of the labor as the construction of actual new structures.
UHERO reports personal income grew 0.6 percent on Oahu and 2.9 percent on Maui last year but forecasts it will grow 2.1 percent on Oahu this year and about 3.5 percent on neighbor islands. This has the potential to be the most significant improvement for the average Hawaii resident in 2014.