Hawaii construction industry may ease virus economic impact

File photo of construction in Honolulu
File photo of construction in Honolulu(Hawaii News Now/file)
Published: Mar. 18, 2020 at 4:57 AM HST
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HONOLULU (AP) — Hawaii’s construction industry could soften the blow to the state’s economy during the continuing spread of the new coronavirus, analysts and business leaders said.

There is optimism that construction could contend relatively well as retailers, restaurants, airlines, hotels, and visitor attractions cut back operations in response to the global COVID-19 outbreak, The Honolulu Star-Advertiser reported Tuesday.

Construction is close to a $10 billion industry that has been one of the top five contributors to the state’s gross domestic product, or economic output, in recent years.

Local government and business leaders have proposed boosting public works construction projects to help offset negative impacts to Hawaii’s economy.

Ongoing government construction projects include the city’s rail system, upgrades to Honolulu Harbor and modernization of Daniel K. Inouye International Airport.

In the private sector, ongoing projects include several hotel or timeshare towers, resort renovation work, retail property upgrades and at least seven residential high-rises on Oahu.

There are about 36,000 workers in Hawaii’s construction labor force.

Construction accounted for 5.9% of Hawaii’s economic output in 2017, according to the U.S. Bureau of Economic Analysis.

Under state Department of Labor and Industrial Relations guidelines, construction work falls in a category of lower exposure risk to COVID-19 in part because job sites do not allow frequent close contact with the general public.

“I don’t see a case for shutting down construction activity as you would see in food service,” economist Paul Brewbaker of TZ Economics said. “Knock on wood, maybe this does turn out that this is one part of the economy that is resilient.”

The number of cases worldwide exceeds 200,000, though more than 82,000 have recovered, mostly in China. COVID-19 has killed more than 8,000 people. The U.S. death toll has surpassed 100.

For most people, the virus causes only mild or moderate symptoms, such as fever and cough, but severe illness is more likely in the elderly and people with existing health problems. According to the World Health Organization, people with mild illness recover in about two weeks, while those with severe illness may take three to six weeks to recover.

Brewbaker said a recession is highly probable and can reasonably be expected to be severe. But it also could be relatively short and allow a quick recovery that does not derail Hawaii’s construction industry.

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