The newest University of Hawaiʻi Economic Research Organization (UHERO) report focuses on the Hawaiʻi economic forecast with an Asia-Pacific outlook.
The Hawaiʻi economy continues to perform well. Visitors are up, unemployment is down and the pace of building remains healthy. But the expansion, now in its seventh year, has yet to fully restore household incomes. And increments to growth will be smaller going forward, with a topping out of construction in 2018 and slowing of annual job growth to a half-percent by the end of the decade. There are large downside risks to the forecast, including the strong dollar and a weak China. Neither is as large a risk as the possibility of policy errors by the incoming Trump administration.
- This year, the global economy has grown at its slowest pace since the Great Recession.
- In 2017, the Asia-Pacific region will recover a bit from the current unusual weakness, but challenges will remain.
- For Hawaiʻi, modest expansion of airline and room capacity will support more than 2 percent visitor growth next year, but arrivals will begin to taper off in 2018.
- Residential building on Oʻahu is in transition from high-rise condo construction to single-family home development.
- Payroll growth in the past two years has been driven primarily by the construction upswing, but further gains in the industry’s job count will be marginal.
- Gains in income have been harder to come by.
- In the first half of the year, consumer prices in Honolulu were up 2.4 percent, the most rapid inflation since 2012.
- Hawaiʻi’s chief risks are broadly the same as those facing the U.S. and the Asia-Pacific region as a whole.