Hawaii’s economic recovery is turning out to be weaker than previously thought, leaving the state in a vulnerable position as the U.S. and global economies continue to slow, according to a forecast released by a group of University of Hawaii economists.

The strongest part of the tourism rebound "is behind us," and the pace of job growth in the state will not be fast enough to make any significant dent in the unemployment rate in the near term, according to the forecast released today by the University of Hawaii Economic Research Organization.

Inflation-adjusted state gross domestic product, the broadest measure of economic activity in Hawaii, is forecast to grow just 1.7 percent this year and 2 percent in 2012. Those estimates are down from 2.6 percent and 3.3 percent growth rates forecast by UHERO in May.

"Against a backdrop of recent local slowing and deteriorating conditions in the U.S. and global economy Hawaii will only see modest growth in 2012," according to the report.

"Hawaii’s recent slowing does not mean that the recovery has unraveled. The visitor industry had made significant strides, construction — at least on Oahu — appears to have stabilized, and limited job growth has begun to occur," the report’s authors wrote.

"However, a slackening from what was already a gradual pace of recovery is disappointing, and it leaves the economy in a relatively vulnerable position at a time when external economic conditions are increasingly gloomy," according to the report.

While the UHERO economists are not forecasting another U.S. recession, they said American economic and political conditions represent "substantial downside risk for Hawaii."

The visitor industry was the first piece of Hawaii’s economy to emerge last year from the 2008-2009 recession. However, further gains will be constrained by weakness in the U.S. and Japanese markets, according to the forecast. UHERO is calling for visitor arrivals to grow by 1.7 percent this year, down from its previous forecast of a 2.7 percent gain. The projected increase for 2012 was revised down to 2.3 percent from May’s forecast of 3 percent.

"Overall, our outlook is for an extended period of relatively slow visitor growth," according to the report. The forecast calls for less than 1 percent growth in the U.S. market next year and only modest additions after that due to persistent weak economic conditions on the mainland.

One bright spot in the visitor industry is the long-awaited opening of Disney’s Aulani resort at Ko Olina, which added 840 hotel and timeshare rooms to the state’s inventory, according to the report. A shorter-term boost will be the Asia-Pacific Economic Cooperation conference in November that will bring an estimated 20,000 visitors during the traditionally weak fall "shoulder season."

In addition, growth from some of the secondary markets, such as Canada, South Korea, Australia and China, is helping to offset some of the weakness in mainland and Japan arrivals.

Near-term prospects for the state’s construction sector remain limited, according to the forecast. Building permit issuance, a precursor of future construction activity, remains low for both residential and commercial projects. Some of that slack, however, will be taken up on Oahu by large-scale projects like rail rapid transit and Kyo-ya’s planned redevelopment of the Sheraton Princess Kaiulani and Westin Moana Surfrider in Waikiki.

The lack of residential activity will continue to weigh on the construction sector. Setbacks include legal challenges to the first phase of Castle & Cooke’s planned Koa Ridge development in central Oahu, and lack of progress on plans by D.R. Horton-Schuler Homes to develop its Hoopili project in Ewa.