Residential building will be key to economic expansion in 2003
By Andrew Gomes
Advertiser Staff Writer
While the state's construction industry didn't exhibit the surging growth that had been forecast for this year, it still was one of the main drivers of economic expansion in 2002 and is expected to be so again in 2003.
Bruce Asato • Honolulu Advertiser
The industry's work force in 2002 expanded to roughly 24,500 jobs through October, up from 23,700 in 2001. And that 3 percent increase is expected to be repeated in 2003, according to state projections.
Home construction was one of the bright spots in the Hawai'i economy in 2002. Economists say the boom in building should continue through 2003 and help fuel economic growth in the Islands. In addition to residential construction, commercial projects and UH projects will be prominent in the coming year.
Led by private developers and residential building — especially on the Neighbor Islands — the industry in 2003 should rise to 2001's construction spending level of $2.5 billion, up from an estimated $2.2 billion to $2.3 billion this year, according to Bruce Coppa, managing director of Pacific Resource Partnership, an alliance of the carpenters' union and contractors.
Still, Coppa said he was disappointed with construction spending this year, which he had thought would hit $2.6 billion. Undermining his projection were deferred government projects and delays in private-sector building, such as a $15 million Burlington Coat Factory and the $49 million Kona Surf renovation.
Construction of a Burlington store and the Kona Surf renovation may not happen in 2003, but sizable projects already in the works should help expand the industry, including hundreds of homes that have been sold but still need to be built.
Among them are local real estate development company A&B Properties, which has sold 17 lots at its Maui residential project, The Summit. Construction of homes is scheduled in 2003 at an average cost of $500,000 each.
A&B also has five more projects next year, including a Marriott Courtyard hotel on Maui, Big Island homes, a Central O'ahu commercial center, a $50 million residential high-rise in Waikiki and resort homes at Ko Olina.
Other significant construction in 2003 includes the University of Hawai'i medical school in Kaka'ako, which recently broke ground; the planned Wal-Mart and Sam's Club stores near Ala Moana, which have begun preliminary sitework; several resort condominiums and time-share projects on the Neighbor Islands; senior-living facilities in Kahala and Punchbowl; and a $110 million luxury condominium at Ward Centre.
Coppa said county, state and federal projects will be important contributors, but private construction — which has accounted for about 70 percent of business the past two years — should again dominate.
Robert Griffith, president of Maryl Pacific Construction, said there appears to be a lot of opportunities in the year ahead between $5 million and $10 million that should also help the industry.
Still, perhaps because of the lack of growth in 2002, he is cautious about forecasting a better 2003.
