Business Economy moving at a snail’s pace By Alan Yonan Jr. Nov. 18, 2011 Mahalo for supporting Honolulu Star-Advertiser. Enjoy this free story! Read more Mahalo for reading the Honolulu Star-Advertiser! You're reading a premium story. Read the full story with our Print & Digital Subscription. Subscribe Now Read this story for free: Watch an ad or complete a survey Log In Already a subscriber? Log in now to continue reading this story. Activate Digital Account Print subscriber but without online access? Activate your Digital Account now. Hawaii’s economy is expected to limp along with slow growth through 2012, economist Leroy Laney said Thursday in a forecast dampened by global economic woes. Laney, in an address to the First Hawaiian Bank’s 42nd Annual Business Outlook forum, said the local economy is "somewhat more downbeat" than he envisioned just a few months ago, due to possible ripple effects from the debt crisis in Europe and the United States’ own debt problems. "Even under the best circumstances the recovery will continue to be much slower than usual," Laney told several hundred members of the local business community gathered for the event at the Neal S. Blaisdell Concert Hall. FORECAST FOR 2012 Economist Leroy Laney is forecasting continued slow growth for the state, due to effects of the financial crisis in Europe and the United States’ debt problems. These figures show year-over-year estimates in key categories: 2011 estimate 2012 forecast Job growth +1.3% +1.2% Unemployment rate 6.2% 5.5% Inflation +3.0% +1.5% Visitor arrivals +3.0% +2.6% Real personal income growth +1.0% +0.9% Source: Leroy Laney Laney, professor of economics and finance at Hawaii Pacific University, said he disagreed with a minority of economists who believe that the U.S. could slip into recession again. "Nonetheless, practically all forecasters — local, national and global — have been revising down their forecasts recently," he said. Laney is forecasting the number of payroll jobs to grow by 1.3 percent this year and 1.2 percent in 2012. That would be enough to push the unemployment rate down from 6.2 percent in 2011 to 5.5 percent in 2012. He is looking for visitor arrivals to grow by 3 percent this year and 2.6 percent next year. Personal income, adjusted for inflation, is expected to grow by 1 percent this year and 0.9 percent next year, Laney said. On the labor front, Laney said the number of payroll jobs statewide is still about 5 percent below the peak year of 2007 before the recession hit. The recession officially started in December 2007 and ended in June 2009. Oahu has made the most progress, with job growth climbing to within 3 percent of pre-recession levels. The neighbor islands are about 10 percent below that level, he said. The recovery in the visitor industry, which was surprisingly sharp in 2010, has begun to wane, Laney said. "Near-term future growth in this industry won’t be as spectacular, even if it remains healthy." Although tourism is a bright spot, its revival has not spread to other sectors of the economy to any significant degree, according to Laney. The industry lagging the most is construction, where job growth only recently turned positive after three years of declines. Still, the total of 28,700 workers employed in the sector in September was nearly 30 percent below the pre-recession peak of 40,000. The outlook for residential construction remains fragile, Laney said. Building permits, a precursor of future building activity, are still weak largely because of the overhang of foreclosures and short sales that make buying an existing home more affordable than a new one. Although government budget constraints are restraining public works spending, the rail transit project could provide a boost to Oahu construction next year, Laney said. Previous Story Business Briefs Next Story Physicians group tackles health care gap for 'others'