UHERO Hawaii Construction 2011 Forecast: Flat Except for Government Contracts
Economic experts at the University of Hawaii Economic Research Organization (UHERO) believe that private construction has largely stabilized in the islands and is poised for limited growth mainly due to government contracting lead by the rail transit project.
A report released today by UHERO projects a cautiously optimistic forecast for Oahu construction in 2011. Construction is predicted to pick-up sharply later in the year when rail transit project is set to begin. Barring any delays, such as legal delays or other factors, this will favor Oahu more than the neighbor islands.
Construction jobs in Hawaii are projected to be raised by 5,000-5,500 jobs at the peak in 2013-2014, which will in turn alleviate the unemployment rate by a projected one-half percentage point.
While the government sector will definitely help boost the state’s economy on the whole in coming years, the housing market will continue to be “very depressed” in the neighbor islands and “it is difficult to see where the next demand upswing will come from.” On the other hand, UHERO forecasts that Oahu will see prices housing price stabilize and edge upwards.
For the state as a whole, a 3% growth in residential permits in 2011 is expected.
UHERO points out that risk to the current construction outlook includes rising energy costs and high interest rates that “could emerge if inflationary fears begin to build”.
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The UHERO Forecast is a community-sponsored research program of the University of Hawaii at Manoa. The Forecast provides the Hawaii community with analysis on economic, demographic, and business trends.