The number of jobs generated by Hawaii’s economy is poised to grow this year for the first time since 2007, helped by the launch of Oahu’s rail project and a modest acceleration of overall economic activity, a group of University of Hawaii researchers reported today.
Businesses are expected to add 8,200 positions this year, including 1,100 jobs related to the $5.5 billion mass transit line and other construction projects, according to a quarterly economic forecast from the University of Hawaii Economic Research Organization. The increase in payroll jobs forecast by UHERO follows three years of declines in which job losses totaled more than 35,000.
UHERO had not included the impact of the rail project in previous economic forecasts because of an uncertain start date. That changed last month when the project got the green light from the Federal Transit Administration and Gov. Neil Abercrombie. The city said it expects to break ground on the project in March.
"Rail transit work will accelerate what would otherwise be a very anemic construction upturn, contributing to a gradual broadening and deepening of Hawaii’s economic recovery," according to the report.
As a result of the rail project, UHERO revised its job growth estimate upward by 1,000 in 2011, 2,000 in 2012 and 3,500 in 2012, said Carl Bonham, the organization’s executive director.
"At the peak of rail spending in 2014 to 2015, the project brings down the unemployment rate by a half of a percentage point," Bonham said.
In addition to the increase in construction jobs this year, UHERO is forecasting employment increases in the hospitality, health care and retail sectors. State and local government jobs are forecast to decline for the third year in a row, while federal positions are projected to shrink for the first time since the recession.
The broadest measure of Hawaii’s economic activity, state gross domestic product, is forecast to grow by 2.7 percent this year, up from 1 percent in 2010. State GDP had contracted by 0.1 percent in 2009 and 1.5 percent in 2008.
The strengthening of the broader economy will help take the pressure off the tourism industry, which carried much of the load in 2010, Bonham said. Visitor arrivals and spending will continue to grow this year but at a slower pace than last year, he added.
The forecast calls for visitor arrivals to grow by 3.8 percent this year after climbing by 8.2 percent in 2010. One of the reasons the increase appeared so pronounced last year was that arrivals in 2009 had been so weak.
"Visitor arrivals in 2011 will grow a bit slower. I wouldn’t be surprised if it even came in lower than our forecast. The wild card to some extent will be the impact from APEC," Bonham said, referring to the Asia-Pacific Economic Cooperation leaders meeting in November, which will bring heads of state from the 21 largest economies in the Asia-Pacific region to Hawaii.
Despite the acceleration of economic growth, inflation will remain subdued, according to the report. The consumer price index for Honolulu is forecast to fall slightly to 1.4 percent in 2011 from 1.7 percent in 2010.
Real personal income is forecast to grow to 2.2 percent this year from 0.2 percent in 2010.