A growing visitor industry and increased construction fueled a strong economy on Kaua‘i this year, but expanding businesses felt the pinch of a tight labor market, said Leroy Laney, an economist with First Hawaiian Bank. “Job growth has decelerated in
A growing visitor industry and increased construction fueled a strong economy on Kaua‘i this year, but expanding businesses felt the pinch of a tight labor market, said Leroy Laney, an economist with First Hawaiian Bank.
“Job growth has decelerated in the last couple of years, simply because workers are harder to find,” he told attendees at a Kaua‘i Chamber of Commerce dinner. “That will continue to be one constraint on the current expansion.”
The unemployment rate for Kaua‘i in 2006 may drop before the end of the year, he said, coming in below the level of the state, which boasts the tightest labor market in the nation.
The absence of a workforce — and the absence of affordable homes for workers — could curb growth, he said.
The number of single family home sales fell almost 30 percent compared to the year earlier period, he said. Median prices continued to rise, but the 13 percent increase this year did not match the 28 percent jump of 2005.
“No market can sustain those steep increases year after year,” Laney said. “Nor should we want it to. It makes it impossible for those who just live and work here to find shelter.”
Despite a drop in the number of residential permit requests, the construction industry continued its boom, offering higher paying jobs that pull workers from other sectors, he said.
High construction material costs increase risk for builders, but the county has a full roster of developments for the next few years, he said, mentioning projects like the new Costco in Lihu‘e, the 190-unit Waipouli Beach condominium project and Alexander & Baldwin’s 1,500-unit Kukui‘ula development.
The tourism industry on Kaua‘i grew 9.8 percent through June this year compared to the year earlier period, despite 40 consecutive days of rain that drove tourists indoors. It’s positioned itself to grow more, Laney said, citing Travel + Leisure and Forbes awards that are expected to increase the draw of the island.
Nawiliwili Harbor brought in more traffic last year, with a new tour ship depositing about 2,000 passengers with each visit, he said, and overnight stops boosting visitor spending.
The Pacific Missile Range Facility provides a growing high-tech sector to round out the economy, Laney said, with about 30 contractors, 880 workers and an annual budget of $150 million.
Growth at the PMRF has driven the construction and renovation of housing to accommodate contractors, he said.
The agricultural industry saw positive development this year, with increased interest in ethanol projects calling for growth at the declining Gay & Robinson sugar plantation. Tropical fruit — particularly papayas — may get a boost next year when the Tropical Fruit Disinfestation Facility opens, he said.
Local growers will also reap the benefit of the county’s new Kaua‘i Made program, which identifies items produced by 75 local businesses, he said.
