Construction needs boost during recession


POSTED: Tuesday, May 26, 2009

Reflecting the sharp downturn in tourism, Hawaii's construction industry has been tumbling at unprecedented rates. The state will need to go forward with state and federal stimulus projects and break ground for the rail transit project by the end of this year to offset any ripple effect—with tidal-wave potential—from crisis-ridden California.

Construction spending in Hawaii neared $1.3 billion in the second quarter of last year but plummeted to less than $440 million in this year's first quarter. Membership in the Carpenters Union Local 745 fell to 7,300 from 7,500, and 45 percent of those remaining members are unemployed, says Ron Taketa, the union's financial secretary.

The University of Hawaii's Economic Research Organization's Hawaii Economy Group expects a loss of more than 9,000 construction jobs by the end of 2011, without factoring the rail project, which is expected to create 4,700 jobs at the peak of construction.

Construction is an integral part of Hawaii's economy, says Kyle Chock, executive director of the Pacific Resource Partnership, which acts as a bridge between contractors and the Carpenters Union. “;The average construction worker makes a healthy salary, and those dollars get distributed into the economy,”; he says.

Hawaii's economic engine remains tourism, and that is affected by the smallest of economic blips on the mainland—especially California—and Asia. Hawaii felt the U.S. recession and then the Japanese recession in the 1990s, just as tourism was jolted in the aftermath of the 9/11 terrorist attacks. The swine-flu scare added to tourism-dampening effects of the current recession.

California voters, who have gingerly approved propositions mandating tax ceilings over the decades, rejected five ballot measures a week ago that were intended to close $5.5 billion from the state's budget gap, which now totals $21.3 billion. The Los Angeles Times reports that California could fire every state employee and close every government office and still be running in the red.

As high-tech companies have bitten the California dust, governors of Maryland, Massachusetts and Texas reportedly are offering inducements to laid-off biotechnology employees. Throughout her administration, Gov. Linda Lingle has called for expansion in biotech, pharmaceuticals, astronomy, ocean sciences, film-making and renewable energy to expand the state's economic base, but more must be done.

That was apparent at Hawaii's oldest and largest job fair last Wednesday. Brant Tanaka, principal at EnviroServices & Training Center LLC, told the Star-Bulletin's Allison Schaefers that he spent much of his time at the job fair turning away unemployed construction workers who lacked required science backgrounds to fill four openings.