I
f you take Hawai‘i construction today at face value, it couldn’t be better.
“We currently are in a construction boom,“ says Russell Inouye, incoming 2025 General Contractors Association (GCA) of Hawaii president.
Data from the state’s Department of Business, Economic Development & Tourism shows there were a total of 41,200 construction jobs in the first seven months of 2024, which Inouye calls “an industry record.”
DBEDT also reports the number of construction jobs in the second quarter of 2024 increased by 9.2 percent, an increase of 3,500 jobs compared to the same quarter in 2023.
Even more construction jobs are being created this year by declining interest rates and new projects.
“We’ve already seen the [Federal Reserve] cut interest rates by 50 basis points in September 2024,” notes Cheryl Walthall, GCA of Hawaii executive director.
LOOKING AHEAD IN 2025
Few rate cuts are expected this year, but substantial federal funding for infrastructure, public works and military projects is expected to further expand Hawai‘i’s construction activity in 2025.
“Hawai‘i continues to receive an infusion of federal Infrastructure Investment and Job Act (IIJA) funds for our state highways, bridges, airports and harbors,” Walthall says. She cites Skyline’s second segment, expected to be completed this year, and downtown Honolulu’s guideway and stations, slated to start this fall. “All have a positive impact on construction.”
Inouye says the outlook for military construction is also very positive. Approximately $2.2 billion has been allocated for 2025 Hawai‘i military infrastructure projects, including about $1.5 billion for the ongoing construction of Dry Dock 5 at Pearl Harbor Naval Shipyard.
Lāhainā is also expected to begin reconstruction this year.
“In September, U.S. Army Corps of Engineers contractors completed debris removal from all residential properties that were destroyed in the fire,” Walthall says, noting that restoring resilient utility infrastructure “must be a priority for the Valley Isle to prepare for residential property development.”
In the private sector, condominium and other residential development also remain strong, Inouye reports, pointing to ongoing construction of Ho‘opili and Koa Ridge, and major new projects in Ward Village, Kaka‘ako, Mō‘ili‘ili and the Ke‘eaumoku – Kapi‘olani corridors.
With work like this underway, what can go wrong?
A CALL TO ACTION
Inouye and Walthall cite five major areas of concern for the industry: Hawai‘i’s construction labor shortfall, ongoing supply-chain disruptions, escalating material costs, rising home insurance rates and Lāhainā reconstruction efforts — which offer an unprecedented building opportunity that may not offset total construction costs.
“Rebuilding Lāhainā will create more construction jobs, but because there is not enough labor on-island to meet the demand, some of the labor force will most likely have to come from O‘ahu,” Inouye explains. “This will further constrain the workforce on O‘ahu at a time when there is so much work in the pipeline. But all of us in the industry want to help the people of Maui recover from the terrible disaster they’ve suffered.”
The cost to rebuild Lāhainā starkly illustrates Hawai‘i’s statewide labor shortfall.
“Workforce development is a top priority for the GCA,” Inouye emphasizes. “We’ll continue our BreakingGround 808 program [in 2025] to teach educators in public high schools so that they can in turn share their knowledge about the real world of construction with their students.”
GCA workforce initiatives this year also include sponsorship of Hawai‘i Construction Career Days, GCA’s annual golf tournament to raise scholarship funds for UH engineering students and developmental support for Hawai‘i Pacific University’s GCA Construction Management Graduate Program, which expands construction career opportunities for those interested in project management roles.
“We will also be launching a new learning management system (LMS),” says Walthall. “This LMS will allow our member companies to give their employees 24/7 access to recorded, on-demand training in addition to live, real-time webinars and training. This will greatly expand the topics and trainings currently offered by the GCA.”
To address other areas of concern, including ongoing supply chain disruptions and escalating material costs, Inouye encourages “greater cooperation among contractors, suppliers, owners and other stakeholders through [GCA’s] various committees.
“We all share common goals: streamlining operations, improving project efficiency and fostering innovation through shared knowledge and resources,” he says.
Hawai‘i’s rocketing home insurance rates are also concerning and have the potential to dampen home sales — and thus Hawai‘i single- and multi-family residential construction, Walthall observes.
“Fortunately, Gov. Josh Green saw the gravity of this crisis and issued an emergency proclamation to help stabilize the insurance market and protect homeowners of both condominiums and townhomes,” she says. “An Insurance Task Force, led by Insurance Commissioner Gordon Ito, is monitoring the insurance market, and has been tasked with implementing short-term fixes and recommending emergency changes or legislative proposals.”
GETTING INDUSTRY VOICES HEARD
The 2025 Hawai‘i legislative session is another opportunity for GCA members to address areas of concern.
“As an industry, we must also shape public policy,” Inouye says. “GCA’s Legislative Committee will continue to play an active role in advocating for policy changes at both the state and county levels, addressing the shifts in today’s marketplace that have rendered some laws or regulations outdated or counterproductive.
“Additionally, we will introduce new legislation to address emerging threats or challenges that make it more difficult to operate. I would also like to strengthen our member services and benefits, to increase the value of membership.
“GCA’s greatest strengths are its members. We each offer a wealth of industry knowledge to support each other. GCA is an ideal resource for networking to meet general contractors, subcontractors, agencies and vendors. I can personally vouch for the value of being involved in the various GCA committees. The time involved in these committees offers a great return,” says Inouye.
Meet Russell Inouye,
Koga Engineering’s
Fourth GCA President
Past Koga Engineering General Contractors Association (GCA) of Hawaii president, Malcolm Koga – 1980 GCA of Hawaii President ALL PHOTOS COURTESY GCA OF HAWAII
Past Koga Engineering General Contractors Association (GCA) of Hawaii presidents, Glenn Nohara – 1996 GCA of Hawaii President ALL PHOTOS COURTESY GCA OF HAWAII
Past Koga Engineering General Contractors Association (GCA) of Hawaii president, Clay Asato – 2016 GCA of Hawaii President ALL PHOTOS COURTESY GCA OF HAWAII
“I am the fourth GCA president from Koga Engineering, so I am stepping into this role with a lot of expectations to carry on our company’s great tradition of service to the industry,” says Russell Inouye, incoming 2025 General Contractors Association of Hawaii president and current president of Koga Engineering.
Koga Engineering & Construction Inc. presidents who previously helmed GCA and their respective terms include Malcolm Koga (1980), Glenn Nohara (1996) and Clay Asato (2016).
“Each Koga Engineering president who served as a GCA president had a different set of challenges, and those who came before me set a high bar to address the challenges before them,” Inouye says. “The challenges for those in my generation is workforce development.
“Addressing this issue is important to me. Providing opportunities for the next generation of construction industry professionals and those in the trades is one of the ongoing priorities for me as the 2025 GCA of Hawaii president.”
Inouye himself knows the value of education, holding a degree in civil engineering from the University of Hawai‘i at Mānoa in addition to Professional Engineers (PE) and contractors’ licenses. His training equipped him to join Koga Engineering in April 1990 as a project engineer, then steadily rise to project manager, operations manager, vice president of operations and finally company president in January 2021.
But no amount of formal training could have prepared him for one lesson he learned early one morning in Waikīkī.
“As the project manager of Niketown, a landmark development, I was tasked with overseeing a two-year project that presented unique challenges,” Inouye says. “The site was located 25 feet below sea level, necessitating the continuous pumping of a million gallons of seawater every day into the drainage system — an around-the-clock endeavor.
“I was single at the time and conveniently living in an apartment just across the street from the site. One evening, I attended a bachelor’s party, enjoying a rare night off.
“The next morning, a knock on my door jolted me back to reality,” Inouye continues. “A concerned individual informed me of an urgent situation at the project site. An electrical power outage had occurred, and the project owners had halted the back-up generator, resulting in the entire site being flooded with seawater.
“Rushing to the site, I was greeted by a surreal sight: forklifts and other equipment floating in a sea of water. It was a moment of sheer disbelief and a vivid reminder of the challenges we faced.
“Despite the unexpected hurdles, the project team’s perseverance and quick thinking enabled us to overcome the flooding disaster. The experience remains etched in my memory, underscoring the unpredictable nature of construction projects and the importance of being prepared for any eventuality,” says Inouye.
