Hawaii Bucks National Trend, Construction Sector Thriving Despite Pandemic

Despite national trends showing a serious slump in commercial construction, the industry is serving as a “lifeline” for the Hawiian economy, despite its reliance on tourism and defense spending.

Source : Picryl / Library of Congress

March 5, 2021

Author : Patty Rodriguez

According to economist Paul Brewbaker, the construction industry has been “remarkably resilient” in Hawaii, with job numbers in the sector stable over 35,000. As Hawaii Business Magazine notes, during the Great Recession, those job figures dropped below 30,000.

“The State of Hawaii and federal military projects had the funding allocation to proceed into construction, Glen Kaneshige, president of the construction company Nordic PCL, told the publication. “The private projects that started during the pandemic shutdown were not dependent on operational revenues in order to secure financing for construction. The large projects will take many months if not years to complete, so the owners or developers were willing to take the risk of starting their projects in anticipation that the pandemic will be gone when completed.”

Meanwhile, federal projects like the F-22 Fighter Jet, have gone on despite the pandemic.

However, unlike many other states, Hawaii’s shutdown of the industry was relatively short. The outlet notes that construction jobs, including mining, quarrying, and oil and gas, made up 6.2 percent of the state’s GDP which is about the same size as the military during the first three quarters of 2020.

Commercial construction is boosted by the resort industry. Hotel companies are reportedly pushing onward with renovations while tourism has hit a snag and booking rates are below the levels of previous years. In late February, hotel occupancy was said to be hovering around just 20 percent.

The state has also seen new educational and healthcare facilities in the works.

Retail and restaurant construction may be “on hold” in the state but other commercial construction projects are keeping the industry afloat.

Like other states, residential construction, the “core” of the industry in that state, is going ahead. Affordable housing projects also serve up to boons to the industry: they both provide work and provide housing to construction workers. 

Infrastructure and public works projects are still going on as well. 

Major players in the Hawiian construction industry are said to be hiring to keep up with the workload.

Despite construction doing well, the overall economy of Hawaii is feeling the pain of the pandemic.

Nearly 20 percent of workers are not fully employed, and Hawaii has the highest unemployment rate of any state in the country, the Hawaii Tribune-Herald recently reported.

Recovery is on the horizon with Hawaii’s GDP, which slumped 7.5 percent in 2020, expected to grow 3.7 percent in 2021, according to a report from the University of Hawaii Economic Research Organization.

Hawaii re-opened to tourism in October, and because of safety measures taken by the state, including a mandate that incoming travelers take a coronavirus test, there hasn't been a significant increase in cases. Yet, with vaccines becoming more available and disruptions including testing and quarantining dissuading people from vacationing there, tourism sector leaders are pushing for a “vaccine passport” which would allow vaccinated tourists to bypass those protocols.

Category : Contractor Trades Coronavirus Pandemic Health and Safety Investment in Infrastructure State Government

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