The Hawaii construction industry is expected to lead the economic recovery with jobs increasing  8.5 percent over the next two years, according to a state employment forecast released Monday.

Overall statewide employment is forecast to expand 2.9 percent, or 19,760 jobs, from the first quarter of 2014 to the first quarter of 2016, the state Department of Labor and Industrial Relations said in its report entitled “Employment Forecasts for the Short-Term Future — 2016.”

The construction sector, which is growing rapidly in Kakaako with the building of several condominium towers, is expected to create 2,580 jobs over the next two years.