4th Quarter 2009

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     The indicators of Hawaii’s construction industry were generally negative in the third quarter of 2009 compared to the same quarter last year.  Increases in the State Government Capital Improvement Project (CIP) expenditures were not able to make up for the decrease in the value of private building authorizations and government contracts awarded. Reflecting the decrease in private construction, construction jobs also decreased substantially in the quarter.  In the existing housing market, the median sale prices for both single family resales and condominium resales in Honolulu decreased in the quarter; however, the number of both single family and condominium units sold in Honolulu increased.

     Construction was one of the major contributors to job growth in Hawaii over the past few years.  From 2002 to 2007, construction job growth averaged 8.0 percent per year.  Since 2008, however, construction jobs started to decrease.  In 2008, construction jobs decreased 2.8 percent compared to 2007.  In the third quarter of 2009, the Natural Resources, Mining and Construction sector lost 5,300 jobs, a decrease of 14.0 percent compared with the same quarter last year.  This is the seventh quarter-over-quarter decline since the second quarter of 2008 (Table A-7). In the first three quarters of 2009, the average construction jobs decreased 12.9 percent or 4,950 jobs compared with the same period of 2008.
      
     In the third quarter of 2009, total value of private building authorizations decreased $131.2 million or 19.0 percent compared with the third quarter of 2008 (Table E-8).  In the third quarter of 2009, the value of new residential permits was down $153.1 million or 44.2 percent; that of new commercial and the industrial permits was down $75.8 million or 57.3 percent; and that of additions and alternations permits was up $97.7 million or 46.2 percent, compared to the same quarter last year.  In the first three quarters of 2009, total private building authorizations decreased $908.1 million or 36.6 percent compared with that of 2008.

     In the third quarter of 2009, the value of total private building permits decreased in all neighbor island counties.  In dollar terms, Hawaii County decreased the most at $89.0 million or 50.6 percent, followed by Kauai at $52.4 million or 59.1 percent, and Maui at $1.4 million or 3.1 percent.  Only the value of total private building permits in Honolulu increased $11.5 million or 3.0 percent (Table E-8) in the quarter.
   
     Government contracts awarded decreased $118.0 million or 33.5 percent in the third quarter of 2009 compared to the same quarter of 2008.  In the first three quarters of 2009, government contracts awarded decreased $82.5 million or 12.1 percent compared with that of 2008 (Table E-1). State Government CIP expenditures increased $52.2 million or 19.8 percent in the third quarter of 2009 from the same quarter in 2008 (Table E-2). In the first three quarters of 2009, CIP expenditures increased $84.3 million or 11.2 percent from the same period of 2008.

     In the third quarter of 2009, the single-family and multi-family unit authorizations decreased 23.3 percent and 82.0 percent, respectively, from the same quarter last year. In the first three quarters of 2009, the single-family and multi-family unit authorizations decreased 29.1 percent and 82.4 percent, respectively, from the same period last year (Tables E-4 and E-5).

     The Honolulu Construction Cost Index for Single Family Residences increased 1.4 percent in the third quarter of 2009 over that of 2008 (Table E-6), while the comparable index for High-Rise Buildings rose 2.3 percent (Table E-7).
   
     In the third quarter of 2009, Honolulu’s median price for single family resales was $581,250, a 5.5 percent decrease (Table E-9); and for condominium resales decreased 6.8 percent to $300,000 compared to the same quarter in 2008 (Table E-10).  In the third quarter of 2009, the number of single-family unit and condominium unit resales were up 4.9 percent and 0.8 percent, respectively, from the third quarter of 2008 (Tables E-11 and E-12).

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