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Economic Currents

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UHERO Hawai'i Construction Forecast: Surge in Nonresidential Building Sustains Cycle

Posted April 6, 2007 | Categories: Hawaii's Economy, Economic Forecasts

Hawai‘i’s construction cycle is near or past its peak,depending on which sector you look at. While the homebuilding peak occurred in 2005-06, the peak in nonresidential construction is likely in 2007 or 2008. The end of this cycle will be characterized by a slow decline in total real construction spending, but continued increase in the nominal tax base as construction costs rise between 4% and 5% each year. With home price appreciation over and affordability at recent lows, real residential construction will continue to recede gradually.


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