Hawaii’s resilient tourism sector will be the catalyst for solid growth in 2016 while the slowly improving construction sector is expected to gain momentum next year, a local economist told business and community leaders today at the 46th annual First Hawaiian Bank Business Outlook Forum.
Jack Suyderhoud said the outlook for the remainder of 2015 and 2016 is a familiar story as the state concludes its sixth year of economic expansion following the 2008-2009 recession.
"Growth will continue led by tourism and construction," he said in an invitation-only event at the Neal Blaisdell Concert Hall.
Suyderhoud is forecasting visitor arrivals by air to finish this year up 4 percent and slow to 2 percent growth next year. He sees visitor spending rising 3 percent each year.
"The reduction in (visitor arrival) growth next year is a reflection of capacity constraints," said Suyderhoud, an economic adviser to First Hawaiian Bank and professor of business economics at the University of Hawaii Shidler College of Business. "The growth of visitor counts has been so good that now the conversation is shifting to the issue of capacity. Future growth rates are expected to be modest because additions to lodging capacity are limited, mostly to some neighbor island areas.
Despite a slower-than-expected recovery in the construction sector, Suyderhoud sees a silver lining.
"Construction has been accelerating in 2015," he said. "Construction permit data plus pent-up demand for housing will show up in greater completed activity."
That should help bring back some of the 6,000 construction jobs that the state has yet to recover since the recession, he said.