Construction jobs going strong

LIHUE — General contractor Joel Koetje says he’s taken on more workers to accommodate a steady stream of construction work within the past two years.

The bulk of the work is coming from the South Shore and Kalaheo areas, Koetje said. Koetje, whose work crew increased by about 20 percent since 2014, said hotel-related construction work is a fallback when residential projects slow down.

“When the housing jobs aren’t going, then the hotel renovation work starts,” he said. “That’s the way it’s been and we’re going to do some hotel work coming up again, too.”

Byron Ganges, senior research fellow with the Economic Research Organization at the University of Hawaii, said a surge in resort-related construction in 2015 has carried over into 2016. With it comes more jobs.

“Last year, we saw a really strong surge on Kauai. It was the first good year for the industry in terms of job creation since the recovery began,” he said. “It has been the resort-related activity that seems to have kick-started this construction expansion in the past year.”

Gagnes said payroll job specifics from the U.S. government show a growth of about 15 percent in the number of construction jobs in 2015 after a small decline in 2014.

“On Kauai, we’re talking about a couple hundred jobs, but a couple hundred jobs amounts to significant growth rate,” he said. “Evidence that the strong rate of growth we saw in last year is carrying over into 2016 with no signs of abating.”

Ganges contributes the increase in construction jobs to hotel projects islandwide.

“It really is spread everywhere. It’s really broad-based,” he said. “They’re not huge projects, but they add up to significant increase in activity to what we’ve seen from most of the periods from the recovery began.”

For instance, the first phase of construction for The Hokuala resort, according to a UHERO report, calls for 47 timeshare units and later a mix of residential properties; the entire project is slated to be 468 units.

“Construction is growing strongly enough that it’s going to be a significant source of additional growth,” Gagnes said.

On the South Shore, phase three work at Koloa Landing is slated to include 200 single-family units, meeting space and resort amenities. Construction is estimated to finish by the end of this year.

In late fall, construction may begin for the Coconut Plantation resort in Waipouli, which is permitted for 192 multi-family units and some hotel rooms.

Hanalei Plantation resort may break ground in 2016 with a combination of 120 luxury bungalows and home lots.

Chip Bahouth, Starwood Hotels & Resorts general manager in Poipu, said this year the hotel spent $4 million on roof work and will continue adding on construction work in the following years.

“In the later part of 2014, we embarked on redoing all the roofs on the hotel, so that was an ongoing process from late 2014 all the way to 2016,” he said. “This year, we’re spending some money on some upgrades to the garden side and we’re looking down the line to do a renovation of all of our rooms, sometime hopefully in 2017.”

Between 2013 and 2014, Bahouth said the hotel took time off from construction, but had dozens of construction workers daily in 2015, which is continuing through this year.

“We had a lot of people here in 2015. We had about 50 people a day. This year we probably have about eight to 10 guys a day,” he said. “When you look at bidding contracts, the construction industry is faring really well. When times are good, companies put money into their properties. You see that phase going on right now.”

Gagnes said construction could see continued growth.

“We have another strong growth of construction growth this year and then we have low, single-digit growth for a couple more years,” he said. “After 2019, we expect the sector begin to contract somewhat. That tends to happen. You get these building cycles where you get a number of years of sustained activities, you see another downturn of activity.”