HONOLULU — Construction spending across Hawaii is expected to reach a decade high of $9 billion this year despite last year’s projections of spending leveling out, according to an economic report.
The analysis by the University of Hawaii Economic Research Organization projects a 7 percent increase in construction spending from last year’s $8.4 billion, the Honolulu Star-Advertiser reported Sunday.
Spending by contractors building homes, renovating hotels, improving public infrastructure and other work should remain at about $9 billion for the next three years, according to the report.
While researchers predicted last year that spending would be flat, the new growth comes in part from smaller-than-expected gains last year. The growth is getting stretched out over two years, and a leveling off is expected further down the road.
“The description is one of relative stability or flatness,” said Carl Bonham, the research organization’s executive director.
Should construction spending grow as predicted, it will be the most since the $10.2 billion recorded in 2008. Hawaii spending peaked in 2007 as $10.6 billion adjusted for inflation.
Construction can be difficult to predict because the time between when permits are issued and the work begins can vary widely, Bonham said.
“If one tower shifts from one year to the next, then you just moved something like $400 million or $500 million from this year to next year,” Bonham said. “That’s a billion-dollar swing.”
Despite the spending increase, the number of industry jobs is expected to fall by 3 percent this year to 35,100. The industry peaked at 38,000 in 2016. The jobs number is expected to remain flat for next three years, according to the report.