The University of Hawaiʻi Economic Research Organization (UHERO) releases a new forecast, predicting a rise in tourism on the neighbor islands and more.
After a rather soft 2014, the counties are poised for better performance over the next several years. Tourism will see additional healthy gains on the neighbor islands for the next two years, before rising occupancy and costs begin to bring down growth rates, something that has already occurred on Oʻahu. Construction, which has disappointed so far, will become a significant contributor to growth. Gains in employment have brought unemployment rates down substantially, and moderate expansion of jobs and income will continue, helping to solidify the local spending leg of the economic expansion.
Report highlights
- Large increases in scheduled airline seats, ranging from 20-30 percent on Maui and the Big Island for the second quarter and mid-single digits on Kauaʻi, will facilitate healthy visitor expansion on the neighbor islands, which will see growth in the roughly 3–5 percent range this year, before tapering off. Continuing weakness in Japanese arrivals will be offset by more robust expansion in other international markets and from the U.S. mainland.
- The construction industry has begun to add a moderate number of jobs on Oʻahu and Maui, but there are no signs of life yet on the Big Island or Kauaʻi.
- Aside from construction, the strongest job growth will generally be seen in the wholesale and retail trade sector in the near term, but slowing as the tourism expansion wanes.
- Overall job growth will continue at a moderate pace in the near term.
- Most of the risks to the forecast are external to the state, including the potential for policy errors by the Fed, heightened fiscal austerity in the U.S., Europe, or Japan, or a failure by China to engineer a “soft landing” of their slowing economy.
For the full public summary go to the UHERO website and for a detailed analysis, subscribe to UHERO’s Forecast Project.
