Economy: Steady as she goes

LIHUE — Clifford Tachera, project supervisor for Shioi Construction, was working Thursday at the American Savings Bank being built at the Hokulei Village shopping center outside of Lihue.

His company, he said, has been busy.

“We just got through an aggressive build of Longs Drugs in Poipu,” Tachera said. “And there are other jobs where we have people working.”

The state’s Department of Business, Economic Development and Tourism projects that Hawaii’s economy will continue to show stable growth in the next few years, according to its fourth quarter 2015 Statistical and Economic Report.

The construction industry continues to boom, the report states.

“We can be busy,” said Conrad Murashige, president of Shioi Construction. “But employment levels are still below they were before the economic recession in 2007 and 2008. The trades are still short and we work overtime, but it’s because of the shortage.”

Murashige said Shioi Construction supports on-island workers, and while commuting from Oahu, it’s not unusual to see more than half of a plane’s passengers coming to Kauai being tradespeople coming to work.

Labor market conditions continue to improve through the first three quarters with civilian labor force, employment and payroll jobs setting historical high levels during the first nine months of 2015, the report states.

The value of private building permits issued during the first nine months of 2015 in the state increased by 29 percent, as compared with the same period a year ago, the report states. Leading the increase was the value of commercial and industrial construction permits with a 144 percent increase, followed by residential permits with an 80 percent increase.

Construction jobs increased 3.5 percent during the first nine months of 2015, the second-highest growth among all the industries. The highest payroll job growth was in arts, entertainment and recreation with 4.3 percent growth.

“We’re pretty much in the same place we were last year in terms of real estate sales,” said Karen Ono, director of the Kauai Board of Realtors. “There was an increase in the number of building permits, but a lot of it was for solar. There is an increase in the number of commercial permits which may indicate businesses coming in.”

The report indicates a shift in the visitor market. Reflecting the strong U.S. dollar and weakening Japanese yen, Japanese arrivals declined by 1 percent through September this year and spending by Japanese visitors declined by 10.1 percent. However, visitor arrivals from the U.S. West Coast market increased 7.5 percent and visitor expenditures from this market increased by 6.9 percent.

“We are pleased that Virgin America started a new daily flight from San Francisco to Honolulu on Nov. 2 and will start a new daily flight from San Francisco to Kahului on Dec. 3 this year,” said DBEDT Director Luis P. Salaveria. “This will bring more West Coast visitors to our state and offset the decline in Japanese visitors. This news and the continued growth in our local job market are positive trends in our state’s economy.”

Sue Kanoho, director of the Kauai Visitors Bureau, said Kauai leads the state in total visitor expenditures for the month ending September 2015.

Kauai finished September with visitors spending $101.3 million, she said. That’s an 8.6 percent increase from $93.3 million for September 2014.

Visitor arrivals for Kauai finished with 84,921 people coming in September, a 4.7 percent increase compared with 81,084 for September 2014.

“We’re doing well with visitors,” Kanoho said. “We have a shoulder dip coming up, but things should return for Thanksgiving and Christmas. We still can’t get too comfortable because the Kauai records show nice numbers. We are still below the numbers in 2007 before the economic recession.”

DBEDT keeps its visitor arrival projection unchanged for 2015 and slightly increased for 2016 to 2018 compared to the projection done in August.

“With an increase of 3.9 percent in scheduled air seats to Hawaii for the fourth quarter, we are confident that 2015 will be a record year for visitor arrivals,” said Dr. Eugene Tian, Economic Research administrator.

According to the U.S. Bureau of Economic Analysis, Hawaii personal income grew by 4.4 percent during the first half of 2015, and DBEDT expects that personal income will increase more in the second half of the year.

Lower oil prices led to a lower inflation rate resulting in Hawaii consumers benefiting from stronger purchasing power from income.

Statewide, 8,100 non-agriculture payroll jobs were added during the first nine months of 2015 as compared with the same period in 2014.

Retail trade added the most jobs at 1,700, health care and social services added 1,700 jobs, professional and business services added 1,600 jobs, food services and drinking places added 1,500 jobs, and construction added 1,100 jobs.

However, federal and state government lost 500 and 800 jobs, respectively, during the same time period.

Hawaii’s unemployment rate during the first nine months of 2015 was 3.9 percent and ranked the eighth lowest in the nation. During the first nine months of 2015, Honolulu’s unemployment rate was 3.6 percent, Hawaii County was 4.8 percent, Maui County was 4 percent, and Kauai County was 4.4 percent.

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