According to the newest University of Hawaiʻi Economic Research Organization (UHERO) report, Hawaiʻi continues on a moderate growth path despite financial market volatility, a surging dollar and global slowing.
Record-setting levels of visitor activity are beginning to feel the adverse effects, but construction strength and a pause in federal sequestration have arrived at just the right time. While risks have clearly heightened in recent months, Hawaiʻi’s outlook is for fairly decent growth over the next several years.
- Last year proved to be yet another record breaking one for Hawaiʻi tourism. In total we hosted more than 8.5 million visitors, about 4 percent more than in 2014.
- Labor market conditions continue their trend improvement. Employment growth is outpacing expansion of the labor force, driving the unemployment rate down to a seasonally adjusted 3.2 percent in December, its lowest rate since early 2008.
- The construction sector is bustling. Last year, the real (cost-adjusted) value of private permits rose nearly 14 percent, the second year of double-digit gains.
- Inflation remained muted in the second half of 2015, largely thanks to falling energy prices. For 2015 as a whole, Honolulu consumer prices increased 1 percent, the lowest rate since 2009.
Hawaiʻi seems more or less on track, however, the problem is a rising risk that global economic conditions could derail the state. Marked slowing in China and the adverse effects on developing countries of plunging commodity prices have prompted concerns about the resiliency of global demand going forward.