A decline in Maui construction jobs is taking its toll on the island's economy, with the downturn threatening to damp its economic prospects for several years.

That's the finding of a new report from the University of Hawai'i Economic Research Organization, which found that construction jobs have fallen by a double-digit rate since peaking in March at about 5,000 jobs.

"Construction has ceased to be a growth engine for Maui's economy at a time when other sources of job growth have stalled," said the report.

"The tourism sector is turning in its worst performance since early 2002, and this is being felt in the accommodations and food sector, as well as in transportation."

The economic research group focused on construction because the sector has been the primary driver of Maui's job market for the past five years. In 2007, the building industry accounted for almost one-third of all new jobs on the island. The second-quarter downturn is also significant in that job losses haven't been significant in other counties.

On O'ahu, construction jobs are down by 1 percent since March, while Kaua'i jobs have remained unchanged. On the Big Island they've fallen 4 percent.

Job losses on Maui since January have totaled 17 percent at an annual rate.

Moreover, the outlook for the jobs is uncertain, given financing problems experienced by a Kapalua project that had primarily been financed by Lehman Brothers, along with worries about how a global recession would affect tourism and new construction.

"Maui's construction downturn comes at a particularly vulnerable time for the local economy," the report said.