Saturday, February 5, 2011

Rail Work Seen as Major Economy Boost in 2011

The University of Hawaii’s forecast for construction spending in Hawaii this year includes anticipated spending on Honolulu rail, the first time the project has been included in forecasts by the University of Hawaii Economic Research Organization (UHERO).

The forecast is for a 3.6-percent increase in construction spending statewide, with statewide industry employment growing 3.7 percent, according to UHERO’s report:

“According to city estimates, the rail project will invvolve the expenditure of about $3.7 billion in local construction, with another roughly $1 billion in professional services. By our estimate, this will raise construction jobs in Hawaii by 5,000-5,5—at the peak in 2013-2014, sufficient to reduce the statewide unemployment rate by more than one-half percentage point.”

As Yes2Rail has insisted repeatedly, Honolulu rail is not a “jobs project.” It’s a transportation project that will restore mobility – the ability to move at will through the urban corridor by elevated rail without regard to surface traffic congestion.

But jobs certainly will be created, and that has to be good, as UHERO notes: “The timing of rail construction is advantageous given the relatively slow pace of recovery expected for residential and non-residential sectors.”

UHERO adds this note of caution, however:

“If rail holds the best near-term prospects for Oahu construction, it also presents a substantial risk. It is impossible at this point to know whether rail work will ramp up quickly, as envisioned in official estimates, or whether legal challenges or other factors will delay progress. Other risks to the current construction outlook include rising energy costs – which would both raise production costs and undercut overall economic growth – and high interest rates that could emerge if inflationary fears begin to build.”

The Honolulu Star-Advertiser has a summary of UHERO’s report.

To that we’d add, there’s no time like the present to begin building this critical piece of Honolulu’s infrastructure, which will serve future generations of Oahu residents throughout the 21st century with enhanced mobility, travel reliability and transportation equity.

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