Kaua‘i economy sizzles

The island’s economy is stronger than he has seen it in the 15 years he has been doing an annual economic outlook, said Dr. Leroy Laney.

“Development on Kaua‘i is quite literally exploding now, beginning a boom that should continue for at least the next several years and even longer,” Laney told an audience at the Princeville Resort last night during the Kaua‘i Chamber of Commerce quarterly general membership meeting. Most of the development is either visitor accommodations or other developments being fueled by the island’s strong visitor economy, he said.

“From 1997 through the first half of this year, the state unemployment rate fell 2.8 percentage points, while Kaua‘i’s rate plunged 7.2 points,” Laney said. In 2003 and so far this year, Kaua‘i’s rate of job creation has been nearly twice the state average. “Kaua‘i’s job strength has been pervasive, including construction and tourism as well as other service sectors such as professional, business and health services,” Laney said.

“One dark side to this boom is the dramatic rise in home prices. In just the first half of 2004, Kaua‘i median residential prices rose 24 percent,” said Laney. “This is leading to a serious shortage of affordable shelter on Kaua‘i, just as on other Neighbor Islands. “Even young professionals often can’t buy, leading to out-migration and more hurdles to diversifying Kaua‘i’s economy.” The housing situation is a serious social problem on Kaua‘i, which has higher proportions of “involuntary part-time workers” and “multiple-job holders” than the national or state average, he said.

“In the longer term, Kaua‘i needs diversification that leads to higher-skilled, living-wage jobs with career paths, plus better educational opportunities,” said Laney, pointing west to the U.S. Navy’s Pacific Missile Range Facility at Barking Sands in Mana and West Kauai Technology & Visitors Center in Waimea as potential sources for those higher-paying jobs.