Government construction projects planned for the Big Island could help soften the decline in residential construction activity that began two years ago, according to Leroy Laney, Hawai'i Pacific University professor of economics and finance.

Weakness in private-sector construction is projected to continue for several more years, highlighting the importance of government projects, such as the $114 million County Building renovation and the $51 million West Hawaii Civic Center, Laney said in remarks prepared for delivery yesterday at First Hawaiian Bank's Hawaii County Economic Outlook Forum.

"This construction serves as a counter-cyclical stabilizer when private activity is down, and better bids on projects can be expected," Laney said.

Like the state as a whole, the Big Island economy has begun weakening after an 11-year expansion, Laney said. Slower tourism, construction, retailing and other sectors have led to a flat job count and rising unemployment in the county.

"Even if the Hawai'i County economy avoids an overall shrinkage, it may feel like one after the recent boom years," Laney told participants at forums held in Hilo and Kona.

In the tourism sector, local businesses were dealt a major blow by the departure of two NCL America ships from the local cruise market, Laney said: "Never has an industry come upon the scene so fast, then exited so quickly."

The Pride of Hawaii was redeployed to the European cruise market in February, while the Pride of Aloha left Hawaiian waters for the Caribbean in July. Of the original three NCL America ships in Hawai'i, only the Pride of America remains in service.

One of the positives for the Big Island visitor industry is the upcoming reopening of the Mauna Kea Beach Hotel, which has been closed for repairs since it was damaged by the October 2006 earthquakes, Laney said.

Other hotels are using the slow time to renovate, he said.