Dec

9

The OTHER key to a Hawaii economic rebound

Filed Under Sunrise on KGMB9 

We know we need more visitors to heal the Hawaii economy, but the latest monthly economic indicators from the state show that the construction sector is taking on increasing importance for the short-term improvement the state so badly needs.

It’s easier to tell this story by leaving aside the usual percentage changes and focusing on raw numbers. The number of unemployed has grown in the past year by 16,000. In the same period, the state has seen more than 5,000 construction jobs go away.

Put another way, a third of the worsening in our employment picture comes from the construction industry. That’s as much as hotel and restaurant job losses combined.

That tells you how much construction is a part of the problem. The report also has data to suggest it can be part of the solution.

Private sector building permits, an indicator of construction to come other than Honolulu rail or military base improvements, have been down a third this year. But in October, the most recent month for which data have been released, they were up 16% from year-ago levels.

Maui County and Big Island building permits are still down. The increase is entirely on Oahu and Kauai. Neighbor island economic recoveries always lag Honolulu so maybe we should be grateful even one other island is seeing a permit jump. You’re impatient, though. Me, too.

Jobs are key for two reasons, not just because every new full-time job can be one less household in hardship, but because employed people spend money and pay taxes, so every improvement in the employment picture has the potential to slow down the worsening of the state budget crisis.

State tax revenues are down 15% for the first 10 months of the year, a period that includes the second half of the last state fiscal year and the first third of the current one. We’re missing two thirds of $1 billion in tax revenue, based on year-before comparison.

The crisis is worsening because every month increases the shortfall, and because we have had several months without significant savings due to the slow pace of labor negotiations.

I don’t see this improving because in recent weeks I’ve spoken to four different public school teachers who thought the crisis was exaggerated and could be readily resolved without significant sacrifice by them. All were ignorant of fundamental facts concerning the deficit and excused their ignorance by saying they didn’t believe what they were being told anyway. I tried explaining the numbers to three of them and their eyes glazed over. With the fourth one I confess I didn’t even try.

Comments

One Response to “The OTHER key to a Hawaii economic rebound”

  1. Richard Ha on December 9th, 2009 8:48 pm

    I was the only person from Hawaii to attend the Association for the Study of Peak Oil conference in Houston in Oct., last month –as well as Oct 2007 in Houston. We have some serious challenges ahead of us in addition to construction. http://www.chrismartenson.com/crashcourse/chapter-17a-peak-oil. We can dodge the bullet with geothermal. But we need to have a talk story with the community. Whatever is decided needs to come from the grassroots up, not the other way around. Richard Ha

Leave a Reply