Consumer spending has declined significantly this year, but it hasn't shown up so far in the amount of vacant retail space on O'ahu.

Empty retail space this year is projected to stand at 3.47 percent, up only slightly from 3.23 percent at the end of last year, according to a new survey by local commercial real estate firm Colliers Monroe Friedlander.

The report suggests that retailers on O'ahu for the most part are weathering the economic storm, and that space vacated by weaker stores often has been leased by stronger players — or, in some instances, by nonretail users.

Colliers, however, is projecting that vacancies will rise above 5 percent in 2010 as retailers struggle with what is forecast to be a year of virtually no economic growth.

Mike Hamasu, research and consulting director at Colliers, said layoffs and furloughs that have only recently begun for state workers will increase pressure on retailers already suffering from declines in spending by other residents and visitors.

"They're definitely not going to be spending as much on retail goods and services," he said. "The government is a big employer."

This year through June, O'ahu retail sales are down about 8 percent, to $863 million, according to state tax figures cited by Colliers, which said it expects sales to remain stagnant if there is little or no job growth next year like economists expect.

Late last year, amid the unfolding global financial crisis and the U.S. recession, Colliers had predicted that retail vacancies would rise to 5.4 percent by the end of this year.

"Our (retail real estate) market kind of skated through this recession so far," Hamasu said. "We weren't pounded badly."

In some markets on the Mainland, virtually entire malls have gone empty this year. But that hasn't happened locally.

O'ahu's retail vacancy rate had improved from a high of 8.53 percent in 2003 to 2.18 percent in 2006 that marked a roughly 15-year low, and since then has remained under 3.5 percent.

This year's rate represents 425,723 square feet of empty space out of nearly 12.3 million square feet.

Colliers said the stable vacancy rate was even more notable because close to 500,000 square feet of new retail space was added to the market, primarily with the opening of Kapolei Commons and Pearl City Gateway shopping centers. Those centers contributed more than 430,000 square feet of occupied space to the market this year.

Also keeping the vacancy rate steady were some retailers that expanded despite the tough economic times. For instance, Ross Dress for Less opened a 30,078-square-foot store last month in a space at Kapolei Commons rejected by Circuit City following its bankruptcy a year ago.

In Waikíkí, fashion retailer Forever 21 leased 42,580 square feet of space at Royal Hawaiian Center abandoned by Hilo Hattie amid its bankruptcy reorganization earlier this year.

"For those retailers that are considering expansion, there are increasing opportunities for them to capitalize on rarely available space," the report said.

Nonretailers also have helped fill vacant retail space, such as the New Hope Leeward church taking over space vacated by a relocated USA Baby store at Waipahu Town Center, and Hope Chapel West Oahu moving into the long-empty former Ashley Furniture store space at Waikele Center.

Another factor keeping vacancy rates down has been developers putting projects on hold. Colliers said at least 4.3 million square feet of planned retail and commercial projects are on hold.