KAHULUI - While tourism remains the driving factor in Maui County's economy, continued growth in commercial construction, real estate and jobs will further assist the county in its economic recovery, economists said Thursday at First Hawaiian Bank's 39th annual Maui Business Outlook Forum.
"Maui's tourism-dependent economy has benefited from the ongoing visitor boom. Slowly these benefits have spread from the tourism sector to other parts of the economy, including commercial construction, retailing, real estate and most importantly, jobs," First Hawaiian Bank economics adviser Jack Suyderhoud said Thursday during the forum held at the Maui Beach Hotel.
"Maui's tourism boom will slow down, but its continued strength will support the rest of the economy," he said. "The business outlook for Maui is positive next year."
A Goodfellow Bros. crew works along Hana Highway on Thursday afternoon in Kahului near the new Alexander & Baldwin Maui Business Park. Economist Jack Suyderhoud said that commercial construction is one of the drivers for the expanding economy on Maui.
The Maui News / MATTHEW THAYER photo
Kenneth Miller (left), First Hawaiian Bank chief investment strategist, and Jack Suyderhoud, First Hawaiian Bank economics adviser, answer questions about the economy Thursday at the 39th annual Maui County Business Outlook Forum.
The Maui News / MATTHEW THAYER photo
At its lowest point in the recent deep recession in 2010, the county lost nearly 9,000 jobs, dropping from more than 72,000 nonagricultural jobs in 2008 to less than 64,000 in 2010, Suyderhoud said. About 5,000 of those jobs have returned, mostly in tourism and other service-related fields, but "the unemployment rate is still well above the 3 percent rate before the great recession," he said.
Construction activity on Maui has been on a slow but steady climb since early 2011 and has made about a 25 percent recovery after plummeting to its low point in 2010.
"Insiders are saying that the mix of work has changed with more opportunities coming from infrastructure and commercial construction and less from residential and time shares," Suyderhoud said.
Large commercial developments like the Puunene Shopping Center, which includes Target, and The Village Center at Maui Lani have propelled local construction forward in the past few years. Projects like the Kihei Police Station and the planned Kihei high school will involve more than $300 million in construction, Suyderhoud said.
But construction is "not out of the woods," as bids for many construction projects, like the $52 million airport access road at Kahului Airport, came in under budget, according to Suyderhoud.
While construction of residential property may have slowed, the residential market has been climbing for the past four years. Based on January-through-July numbers this year, sales for both single-family and condo units were well on their way to reaching figures not seen since their peak in 2007 - 1,000 single-family units and 1,300 condominium units sold.
"The market is getting back to where it was," Realtors Association of Maui President P. Denise La Costa told The Maui News last month. "When inventory is low like this, it means prices will rise, and inventory will continue to shrink."
Maui's real estate inventory has declined 11 to 14 percent over the past 12 months, La Costa added.
With the Maui Mall adding a TJ Maxx store scheduled to open in summer 2015 and Queen Ka'ahumanu Center planning to add new "name brand" shops, the retail sector also is expected to grow, Suyderhoud said.
Maui's other economic drivers that contribute significantly to the island's economy include Hawaiian Commercial & Sugar Co., Haleakala observatories, Maui Research & Technology Park in Kihei and the University of Hawaii Maui College.
Hawaii's economy, which is measured by real gross domestic product, is expected to exceed prior peak levels of $60 billion in 2008. In its third quarter "Outlook for the Economy" published last month, the state Department of Business, Economic Development and Tourism forecast a 2.9 percent GDP increase in 2013, and a growth of 2.4 percent in 2014.
The report also projected state unemployment rates to be 4.8 percent in 2013 and 4.5 percent in 2014.
* Eileen Chao can be reached at firstname.lastname@example.org.