The drag on Hawaii’s economy from an extended slump in the construction and government sectors will end this year, setting the stage for broader economic growth, according to a forecast released today by the University of Hawaii Economic Research Organization.
The state’s tourism industry will continue to be the main driver of growth with both visitor arrivals and spending reaching record levels this year, UHERO researchers reported in the quarterly forecast.
"After a slowdown in the middle of last year, the Hawaii visitor industry is now expanding at a healthy clip. Strong visitor performance is occurring across the state, although the neighbor island markets are not yet back to their pre-recession levels," according to the report.
LOOKING UP
Year-over-year percent changes through 2014:
| |
2011 |
2012 |
2013 |
2014 |
| Visitor arrivals |
3.5% |
5.2% |
2.5% |
1.7% |
| Payroll jobs |
0.9% |
1.5% |
2.2% |
2.2% |
| *Unemployment rate |
6.7 |
6.1 |
5.4 |
4.9 |
| Inflation rate |
3.7% |
3.2% |
2.5% |
2.6% |
| **Personal income |
0.7% |
1.5% |
2.7% |
2.9% |
| **Gross domestic product |
1.3% |
2.2% |
3.1% |
3.6% |
*Percent of work force
**Adjusted for inflation
Note: Figures for 2012-2014 are forecasts
Source: University of Hawaii Economic Research Organization
|
The forecast calls for the number of visitors traveling to Hawaii to grow by 5.2 percent this year to 7.5 million. Spending, meanwhile, is on track to climb by 12.7 percent to $14.1 billion. The projections are similar to those issued Wednesday by the state Department of Business, Economic Development and Tourism.
UHERO expects the overall economy to grow by 2.2 percent this year after adjusting for inflation, matching the DBEDT forecast.
On the labor front, UHERO is predicting the number of payroll jobs in the economy to grow by 1.5 percent this year as multiyear declines in construction and government hiring come to an end.
Construction jobs are expected to grow by 1.3 percent to 28,700 in 2012, which would be the first annual increase since 2007. The rebound will strengthen in 2013, with job growth in the sector expanding by another 9 percent, according to the forecast.
Government jobs are forecast to grow by a scant 0.1 percent to 124,900. It would mark the first rise in government hiring since 2009.
Another encouraging sign in the labor market is a decline in the number of people filing claims for unemployment insurance, the UHERO researchers said. Claims fell by 5 percent in the first quarter from the same three-month period a year earlier.
Unemployment, which has averaged 6.8 percent since the end of the 2008-2009 recession, is expected to drop to 6.1 percent in 2012 and then to 5.4 percent in 2013, according to the forecast.
