Hawaii’s booming construction industry is contributing more to the islands’ economy than any other state in the U.S. other than North Dakota.
BUILDING BOOM
The top five states for construction as a percentage of state gross domestic product in 2015:
1. North Dakota 7.6%
2. Hawaii 5.9%
3. Montana 5.8%
4. Wyoming 5.7%
5. Louisiana 5.5%
SHOWING IMPROVEMENT
The difference in percentage points for construction as part of state GDP to 2015 from 2014:
1. Hawaii 0.5%
2. Florida 0.3%
(tie) Montana 0.3%
(tie) Nevada 0.3%
5. 13 states tied 0.2%
Source: U.S. Bureau of Economic Analysis, Associated Builders and Contractors
Construction accounted for 5.9 percent of gross domestic product in Hawaii in 2015, according to a report issued Wednesday by the Associated Builders and Contractors. Hawaii’s GDP — the broadest measure of economic output — was $79.7 million in 2015, according to the U.S. Bureau of Economic Analysis.
Only North Dakota’s construction sector contributed a larger percentage of that state’s economy at 7.6 percent.
“Hawaii has benefited from investment from the tourism industry as well as residential construction,” Bernard Markstein, president and chief economist of Markstein Advisors, which conducted the analysis for ABC, said in an email.
“A big part of that has been building new hotels and condos and renovating old ones. Also, as a relatively small economy (38th largest in the U.S.), small changes in construction spending can have large effects on the contribution from construction to the state’s economy. Starting with 2010, the state has posted steady growth each year. Construction has been an important factor in that growth.”
In 2014, Hawaii’s construction sector as a percent of GDP ranked fifth in the nation. Since 2007, Hawaii has ranked in the top five each year.
Hawaii also saw an increase of 0.5 percentage points from 2014, the largest year-over-year improvement of any state.
The results of the report were no surprise to Eugene Tian, chief economist for the state Department of Business, Economic Development and Tourism.
“We know construction in Hawaii last year was a record year,” Tian said. “It’s the fastest-growing industry in the state. Construction is not only adding value to the current year but will contribute to the economy for many years to come.”
Markstein said building still played a big role in the nation’s economy in 2015, increasing in percentage contribution to GDP nationally and in 30 states.
“The industry continues to experience growth following the Great Recession, led by investment in lodging, office, manufacturing and multifamily construction,” Markstein said. “The recovery is being led by consumers who have benefited from improved job markets, increased income and low energy prices and who are spending their increases in disposable income.”
