The construction crane is again becoming an endangered species as Hawai'i's other state bird.

A new forecast for the state's construction industry, which in recent years has been one of the primary drivers of local economic growth, anticipates a $2 billion, or 25 percent, downturn in spending over this year and next year before a very slight rebound in 2011.

The report, from the University of Hawai'i Economic Research Organization, also projects a loss of 8,130 construction jobs over three years — from 38,960 jobs last year to 30,830 in 2011.

"The global credit crisis and deepening recession have materially worsened prospects for the Hawai'i construction industry," the report said.

Two massive planned government transportation projects — O'ahu's 20-mile rail line and a modernization of state highways — potentially could more than offset the anticipated spending decline and add nearly 6,000 jobs by 2013. But UHERO said it excluded the two projects from its forecast because of uncertainty as to when construction work might begin given permitting issues and pending action by the Legislature.

The UHERO report dramatically revises a report the organization issued in September that had forecast a roughly $400 million, or 2 percent, decline in nominal construction spending from 2008 to 2010.

"Things deteriorated pretty rapidly," said Carl Bonham, UHERO's executive director who is a co-lead author of the report with local economist Paul Brewbaker of TZ Economics.

Continued drops in housing demand and tourism since last year, combined with the upheaval in global financial markets, have caused numerous planned private development projects in Hawai'i to be put on hold, scaled back or slowed.

UHERO said government projects are contributing significantly in the face of falling private residential and commercial construction, but not much additional near-term help is expected from state and federal projects under economic stimulus plans.

"Government spending initiatives may provide substantial support for the industry in the medium term, but they will provide very little stimulus over the next two years," the report said.

On the private sector side, projects that have deferred or slowed work include the $1 billion expansion of the Kaua'i Lagoons resort, a 100-unit townhome project called Ka Milo at the Big Island's Mauna Lani Resort, the $725 million Kukui'ula resort subdivision on Kaua'i and the Moana Vista high-rise condominium in Honolulu. In December, the developer of the 46-story Moana Vista cut the price on about 60 units in the 492-unit project to spur sales. The highrise is scheduled for completion in June 2010.

Several big construction projects slated for completion later this year, such as the Trump International Hotel & Tower in Waikiki and the Ritz-Carlton Club and Residences in Kapalua, Maui, aren't expected to have their construction cranes — and many of their workers — used somewhere else soon.

It was about six years ago when Hawai'i developers began to revive the old joke about the construction crane supplanting the nene as the state bird.

Nominal construction spending, which includes higher costs due to inflation, is estimated to have peaked last year at about $8 billion, up from about $7 billion in 2006 and $5 billion in 2004.

If industry spending falls the projected $2 billion — from $8 billion last year to $6.6 billion this year and to $6 billion next year, spending would still be higher than it was during part of the recent construction industry boom.

UHERO said spending is expected to rebound by 0.37 percent, or $22 million, in 2011.

When adjusted for inflation, real construction spending from 2008 to 2011 is expected to decline 29 percent as opposed to the projected 25 percent decline in nominal terms. Adjusted for inflation, construction spending in 2011 is projected to dip 2 percent.

Bonham said the relatively short contraction is expected because developers didn't build as many homes and resorts as they did in the late 1980s and early 1990s — a building boom that collapsed with a loss of about 14,000 jobs over most of the past decade.

"We didn't have as big of a boom (in recent years), and we're still thinking we're not going to have as big as a bust," he said

However, Bonham noted that the extremely fragile nature of the national economy and global financial markets add considerable risk that Hawai'i's construction industry may experience a greater decline than UHERO projects.

On a positive note for builders, construction cost inflation that helped drive spending higher during the boom, is anticipated to come down close to 1 percent next year.

As part of UHERO's construction report, the organization forecast median single-family home prices on O'ahu to fall 17 percent from a peak of about $640,000 in 2007 to $533,000 in 2011.

The projection includes declines of 9 percent this year, 5 percent next year and 0.6 percent the following year. Last year, the median declined 3 percent.

UHERO also projects that the median condominium price on O'ahu will decline 24 percent over the same period from about $325,000 to $246,000. The projection includes declines of 8.5 percent this year, 10 percent next year and 7 percent the year after that. The median price was virtually unchanged last year.