A Hawaii economic group is boosting its growth forecast for the tourism industry next year but holding its collective breath for future state expansion due to possible policy errors that could be made by President-elect Donald Trump’s incoming administration.

The University of Hawaii Economic Research Organization said in a report due out today that modest expansion of airline and room capacity in the state will support more than 2 percent visitor growth next year before arrivals begin to taper off in 2018.

UHERO sees one more solid year for the state economy before it slows down.

“The Hawaii economy continues to perform well,” UHERO said in the report. “Visitors are up, unemployment is down, and the pace of building remains healthy. But the expansion, now in its seventh year, has yet to fully restore household incomes. And increments to growth will be smaller going forward, with a topping out of construction in 2018 and slowing of annual job growth to a half-percent by the end of the decade.”

UHERO said Oahu is in transition from high-rise condo construction to single-family home development and that even though the construction cycle will peak late in the decade, that continued residential building will prevent a sharp industry downswing. UHERO projects that home prices will grow in the 4-7 percent range over the next several years.

Besides the uncertainty of a Trump administration, UHERO cautioned that the state economy also could be affected by global challenges, including China’s turn away from manufacturing, high private debt levels in some countries, a strong dollar and rising U.S. interest rates.

UHERO said that despite the state’s long expansion, inflation-adjusted hourly wages and labor income per worker are at roughly their 2007 levels, and the median family income is still 4 percent behind its pre-recession peak. UHERO projects that real, or inflation-adjusted, personal income will end this year up 2.4 percent and then taper off with increases of 2.2, 2 and 1.7 percent, respectively, during the next three years.

Visitor arrivals, likewise, will follow the same path. UHERO expects arrivals to be up 3 percent this year — a fifth straight record year — before growth slows to 2.4, 1.4 and then 0.5 percent from 2017 through 2019. UHERO forecast in its September report that arrivals would be up 2.3 percent this year and 1.5 percent next year.

UHERO said the largest near-term risk for the state economy is uncertainty about trade and economic policy under the Trump administration.

“While fiscal stimulus could boost growth in the near term, we are more concerned about the potential downside of ill-considered policy choices, which could derail the expansion or lower the longer-run growth potential for both the Asia-Pacific region and for Hawaii,” UHERO said.

UHERO sees nonfarm payroll jobs slowing over the next three years, with the unemployment rate rising. The organization predicts jobs will rise 1.1 percent in 2017 and then tick up just 0.9 percent in 2018 and 0.7 percent in 2019. The jobless rate is seen as remaining at 3.2 percent in each of the next two years before rising to 3.5 percent in 2019.

Inflation is seen rising from a projected 2.4 percent increase in 2016 to 3.3 percent in 2017 before rising by 3.0 percent in 2018 and by 2.8 percent in 2019.

UHERO said Hawaii’s inflation-adjusted gross domestic product — the broadest measure of economic output — is estimated to rise 2.3 percent this year, up from its earlier September forecast of 2.0 percent, and then increase 2.1, 1.9 and 1.8 percent over the next three years.