Hawaiʻi’s construction market records fast start in Q1, but a drop in housing activity raises concern

The state’s construction industry posted its second-strongest first quarter in the past decade, with total spending reaching approximately $2.09 billion, according to the Quarterly Hawaiʻi Construction Market Update released by Pacific Resource Partnership.

The robust Q1 result was more than what was recorded in the first quarter of last year ($1.84 billion) as well as the previous quarter, Q4 2025 ($781 million).

Despite the positive start to construction spending in 2026, there was a significant drop in single-family ($126 million less) and multi-family ($229 million less) activity compared to Q1 of last year.  

“Although we could see an upswing in construction activity for single-family and multi-family housing during the rest of the year, it’s critical for our policymakers to focus on building new homes,” said Pacific Resource Partnership Executive Director Nathaniel Kinney. “Hawai‘i needs more than 64,000 housing units just to catch up. That means lawmakers should focus on easing the regulatory burden on our homebuilders, investing in infrastructure for new homes, and fully committing ourselves to transit-oriented development.” 

Public works projects, particularly large state-level infrastructure initiatives, continued to serve as the primary driver for construction activity in Q1. Federal construction projects totaled just $1 million, although spending in this sector is expected to pick up as the year progresses.  

Meanwhile, private construction declined in Q1 compared to the same quarter last year ($1.17 billion compared to $857 million). A notable absence is the renewable energy market segment, with no activity recorded as of the end of April.

As noted in the most recent economic forecast by the University of Hawai‘i Economic Research Organization (UHERO), construction remains as one of the “bright spots” in the state’s economy with labor demand expected to remain strong and the current workforce consisting of more than 41,000 individuals.   

Total Construction by Island (Q1 2026):

• Maui — $170 million
• O‘ahu — $1.62 billion
• Hawai‘i — $232 million
• Kaua‘i — $73 million

Key Island Highlights (Q1 2026):

• Maui activity was dominated by public projects, with multi-family housing slowing from 2025 levels.
• O‘ahu continued to lead statewide construction activity, driven largely by major highway projects.
• Hawai‘i County (Big Island) saw steady public works activity, with major infrastructure projects such as wastewater treatment upgrades moving forward.
• Kaua‘i recorded one of its slower quarters in recent years, with construction heavily concentrated in county and state public sector projects.