Building bust


POSTED: Sunday, May 24, 2009

Brandon Cruz, a carpenter's apprentice, used to pound nails.

Now he pounds tunes on a guitar to earn money while the severe downturn in Hawaii's construction industry plays out.

“;It got hard to find jobs toward the end of last year. Before that, there was always work,”; said Cruz, who was among 6,500 people vying for jobs at Workforce, Hawaii's oldest and largest job fair, on Wednesday.

Since construction has declined, Cruz has worked odd jobs and the occasional late-night music gig to survive. He walked around the job fair with his guitar strapped to his back offering music samples to potential employers; however, it was a tough crowd, and Cruz left when he could not find anyone to listen.

Some construction workers have jobs in this economy, but most are playing Cruz's tune. The Hawaii Carpenters Union, Local 745, the state's largest building trade union, has declined to 7,300 members from 7,800 a year ago, and of those, 45 percent are out of work, said Ron Taketa, HCU financial secretary and business representative.

“;Some have not had work in over a year and have already exhausted all of their state unemployment benefits,”; said Kyle Chock, executive director of the Pacific Resource Partnership (PRP), which serves as a bridge between Hawaii's leading contractors and the Hawaii Carpenters Union.

The situation has become so desperate that some members have turned off their cell phones to save money, Chock said.

“;We can't find them to tell them about open jobs,”; he said.

Others have begun taking hardship withdrawals from their 401(k)s, Chock said.

Harder-to-fill construction-related jobs in fields like environmental science and engineering are still open, as evidenced by EnviroServices & Training Center LLC's presence at the recent job fair; however, the industry's bread-and-butter jobs have dried up.

“;We've been trying to fill four positions for the last five months,”; said Brant Tanaka, principal at EnviroServices & Training Center LLC, who spent a good part of the job fair politely deflecting inquiries from unemployed construction workers, who did not have the required science background for the work.

“;They are looking for anything that they can get right now to feed their families,”; Taketa said. “;The unemployment levels are tragic.”;

Seasoned journeymen Sam Ige, who has been in Hawaii construction since 1970, said he was benched for about a third of last year; however, he found work this year at Halepawaa, a nine-story office building.

“;I'm kind of lucky this time,”; he said. “;To me this downturn hasn't been as bad as some that we've seen before.”;

However, the affects could be acute for younger workers who are less prepared for the decline, Chock said.

“;They thought that the party would never end,”; he said, “;but everything went off the cliff late last year.”;

Private-sector construction jobs, which comprised 75 percent of the last cycle, disappeared as the credit crunch hit, Taketa said.

“;By the middle of last year, it was clear that we were all going to have a rough go of it,”; said Lance Wilhelm, senior vice president for Kiewit Building Group.

PRP data showed that construction revenue in Hawaii fell to $439.8 million in the first quarter of 2009, a 45 percent drop from the same period in 2008 and a 39 percent drop from the fourth quarter of 2008.

These figures translate into hard times not only for Hawaii's construction industry, but for the state as a whole, Chock said.

“;You can't have a healthy economy in Hawaii without having a healthy construction industry because of the multiplier effect,”; he said. “;The average construction worker makes a healthy salary, and those dollars get distributed into the economy.”;

While the first of state and federal stimulus projects have gone to bid, Hawaii economists have said that they won't be enough to grow the industry, which could lose another $2 billion in construction spending over the next two years.

“;Residential and commercial construction are on the downside and could take several more years to reach bottom,”; said Byron Gangnes, an associate professor of economics and the director of the University of Hawaii's Economic Research Organization's Hawaii Economy Group.

And, due to the length of the prior buildup and the continued uncertainty of the financing market, recovery could be slow, Wilhelm said.

“;Generally speaking, the busier you are at the peak, the longer the trough, and this was a darn good peak,”; he said.

The construction industry anticipates that the downturn will extend into the middle of next year, Taketa said.

Federal and state spending will not be enough to return the industry to its previous boom, he said.

UHERO has forecast that by the end of 2011, Hawaii's construction industry will have lost more than 9,000 jobs. UHERO did not factor the rail project into its forecast because of the uncertainty surrounding its delivery; however, Gangnes said that when under way, it likely would boost Hawaii's economy.

“;We hope to break ground at the end of the year,”; said Honolulu Mayor Mufi Hannemann.

When in full throttle, rail will create 4,700 construction jobs and some 11,000 related jobs, Hannemann said.

“;There is no bigger stimulus project for Hawaii than rail,”; Chock said.

Market uncertainty makes it challenging to predict when the jobs will come back, but Taketa said that union members will be ready when the work becomes available.

The Hawaii Carpenters Union was slated to open a $25 million training center yesterday, he said. The 56,000-square-foot facility at the Kapolei Business Park symbolizes the union's commitment to providing the best-trained carpenters in Hawaii, Taketa said.




By island

        First-quarter construction spending has varied by island:


Oahu$280.7 million-29 percent-41 percent
Big Island$44.2 million-78 percent-52 percent
Kauai$24.3 million-76 percent-52 percent
Maui$90.5 million-11 percent-9 percent


        * Excludes permits and bids under $50,000, federal IDIQ (indefinite delivery/indefinite quantity) projects and public/private joint ventures

Source: Pacific Resource Partnership