Expected Hawaii Construction Boom Too Big for Tight Labor Market

Expected Hawaii Construction Boom Too Big for Tight Labor MarketAlthough Hawaii construction has been sluggish over the last decade, it’s rebounding in big way. So big, in fact, that the state’s existing labor force may not be large enough to meet current demand.

Hawaii Construction Is Staging a Comeback

For the island of Oahu, experts predict a 17 percent growth in construction by 2015, with around 5,000 jobs opening up.

According to a report from Hawaii’s Department of Business, Economic Development & Tourism (DBEDT), the state needs to add around 5,500 new residences per year to keep up with its 1 percent population growth. Over the last five years, a little less than 60 percent of those residences have been built each year. For 2014, however, DBEDT experts project a 23.3 percent increase in applications for residential building permits.

The Hawaii Community Development Authority’s plans for Kakaako, Honolulu’s commercial and retail district are another big contributor to demand. Some 30 condominium high-rises are planned for the area, along with smaller housing and retail developments.

Projected Labor Shortage

Hawaii construction involves considerations construction on the mainland doesn’t have, and the labor force is one of those. Unlike in the contiguous U.S., a local labor shortage can’t be easily made up for with workers from across state lines.

Bill Wilson, president of Hawaiian Dredging Construction Co., one of largest general contractors in Hawaii, warns development by the state’s main contractors will require all of Oahu’s construction workforce.

Hawaii’s trade unions are doing what they can to locate new workers. With the workforce on Oahu limited, they’ll be turning to neighboring islands for union workers. They’ll also look to re-sign former union workers and, if necessary, hire non-union workers. After that, the plan is to bring in workers from the mainland.

The good news is that demand for new housing and retail space on neighboring islands is still low compared to Oahu, so while the labor shortage may slow development, it isn’t expected to create any major interruptions.

Get the latest on Hawaii construction and building projects around the nation by contacting us at Construction Monitor.

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