Betting on building

LIHUE — As far as Billy Williams is concerned, there is no doubt business on Kauai is picking up steam, the economy is turning and people are spending money.

“It’s definitely blowing up,” said the owner of custom home builder Williams Construction.

Williams said he typically receives two to three calls per month for new homes. In the last month or so, however, he’s been fielding two to three calls per week, along with double the number of inquiries about remodel jobs.

“There’s a lot of potential work,” he said Monday.

Construction, along with other sectors, is expected to lead the island’s economic expansion in the coming years, according to a recent report from the University of Hawaii.

“The employment picture has improved considerably, and significant income gains are on the way,” Dr. Byron Gangnes, senior research fellow with the UH Economic Research Organization, said in a release. “Construction, which has lagged (in) the rest of the state, has finally begun to edge upward. This will provide additional support for moderate growth over the next several years.”

The annual report is part of a contractual agreement between UHERO and the Kauai Office of Economic Development. It predicts continued recovery and expansion on Kauai through 2016.

“Kauai’s economic recovery accelerated last year,” it reads. “Visitor industry gains, while off 2012’s robust pace, were the strongest among the neighbor islands, and job growth was solid.”

Following four years of significant job losses, UHERO reports that the Kauai construction industry appears to have finally turned a corner. After a 3.5 percent growth this year, the report predicts growth in construction jobs to rise another 5 percent in 2015, followed by 11 percent in 2016.

Existing home sales have risen 70 percent from their low point in 2009, and median single-family home prices rose 13 percent last year, according to the report.

Visitor numbers are also expected to rise.

In 2013, more than 1.1 million tourists visited Kauai, up 2.7 percent from the previous year. And total visitor days increased 4 percent, setting a new record.

While U.S. visitor arrivals increased by only 1.5 percent, arrivals from international markets jumped by 8.2 percent. The average hotel occupancy rate was around 69 percent, up about half a percent from 2012, but well below the 75-78 percent range seen before the recession, the report states.

Additionally, the average hotel room rate on Kauai has risen by 20 percent over the past three years. In 2013, rates averaged $226 per night, up 7 percent from one year prior, helping to boost overall visitor spending by nearly 13 percent.

The report predicts a 1.7 percent growth in visitor arrivals this year, followed by a 3.6 percent rise next year.

Diann Hartman, spokeswoman for the Grand Hyatt Kauai Resort and Spa, said the hotel continues to see steady occupancy rates and an average length of stay comparable to last year.

“People continue to book more short term than say 3-5 years ago,” she said. “This is most likely due to airline pricing where the customer is looking for a great fare.”

In the agricultural sector, Kauai has experienced a period of consolidation. Between 2007 and 2012, the island dropped from 748 farms to 591, according to the report. However, the aggregate value of crop and livestock sales increased more than 40 percent to nearly $64.5 million.

“Seed crops, primarily corn grown for seed, continue to play a large role in the the local agricultural industry,” the report reads.

While Kauai’s unemployment rate remains around 5 percent, it’s well below 2009 levels when it peaked above 9 percent. Overall, the job base will expand by 2 percent this year, with similar rates of growth for the next several years, the report reads.

By the end of the year, OED is expecting to launch an interactive database of Kauai-specific economic statistics, which Director George Costa said will be useful for research, forecasting, business planning and grant writing.

The full UHERO report can be accessed on the county’s website at www.kauai.gov/oed.

 

Chris D’Angelo, environment writer, can be reached at 245-0441 or cdangelo@thegardenisland.com.

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