Carpenters see work dry up as projects stall
Pacific Business News (Honolulu) - by Janis L. Magin Pacific Business News
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Hawaii's unionized carpenters have gone from being fully employed to seeing nearly 20 percent of their ranks put out of work in just the past 90 days.
Some 1,500 of the 7,800 members of the Hawaii Carpenters Union are now jobless, said Ron Taketa, the union's financial secretary and business representative.
The numbers include about 900 members on Oahu, which has 75 percent of the membership, 200 on the Big Island and 250 on Maui.
While Hawaii's construction industry was anticipating the volume of work would slow this year, the abruptness of the downturn is taking many by surprise. As with the sudden shutdowns of Aloha and ATA airlines and several smaller employers, March marked a turning point that saw activity in a number of industries come to a standstill.
The carpenters were fully employed at this time last year and as recently as February, only 100 or so were out of work, Taketa said.
The upheavals in the nation's financial markets have led big lenders to cut off financing for construction projects already under way, which recently happened at the luxury Hokulia golf course development on the Big Island. Or developers can't find the financing to get started.
"There was a dramatic rise in unemployment just caused by the financial institutions," Taketa said. "Within a three-month period the unemployment just skyrocketed because of the subprime problem."
Although a number of government and military projects on Oahu are helping to keep the construction business fairly healthy in the current economic downturn, a slowing in the residential home-building business has cost many carpenters jobs.
Sales have slowed and some projects have been delayed or scaled back. And one large residential project, Castle & Cooke's Mililani Mauka, will be completed this summer, with no other new developments ready to be built.
"It's just kind of across the board cooling or leveling off, which is not entirely unexpected coming off the boom years," said Kyle Chock, executive director of the Pacific Resource Partnership, a joint program of the Hawaii Carpenters Union and some 200 unionized contractors across the state.
The Carpenters Union membership hit a high of 10,000 before the Japanese bubble of the early 1990s. By 2000, membership had fallen to about 4,000.
Union membership has increased to 7,800 today, Taketa noted.
But only a little more than 6,000 are working.
"We're the first to be laid off and the last to be brought on to a project," Taketa said. "That's the unfairness of it all ... we get laid off first and recalled last."
The economy isn't entirely to blame for the slowdown. Building permit delays and county ordinances for affordable housing requirements and water usage have slowed some projects down.
Stanford Carr recently received the building permits for his company to begin a Neighbor Island project, but he said he's holding off on construction.
"There isn't a demand," said Carr, president of Honolulu-based Stanford Carr Development. "Everyone is very hesitant and uncertain about the future. I think everyone is kind of wait-and-see."
Several large residential projects are planned for Central and West Oahu -- including D.R. Horton-Schuler Division's Hooipili and Waiawa, a joint venture between Alexander & Baldwin and Gentry -- but those won't get off the ground for several more years.
D.R. Horton's Schuler Division hasn't seen much of a change in demand in the past four or five months, said division President Mike Jones.
The developer has two projects on Oahu under construction -- Sea Country-Nohokai in Waianae and Kahiwelo at Makakilo -- and one, Nanala at Mehana in Kapolei, where work hasn't yet begun.
"We're patiently waiting for permits so that we can get started down there," Jones said.
