Look for Hawai‘i’s economy to continue to prosper in 2005. That’s the report issued Sunday by Carl Bonham and Byron Gangnes of the University of Hawai’i Economic Research Organization. The economic research group gave a positive report on Kaua‘i’s economy
Look for Hawai‘i’s economy to continue to prosper in 2005.
That’s the report issued Sunday by Carl Bonham and Byron Gangnes of the University of Hawai’i Economic Research Organization.
The economic research group gave a positive report on Kaua‘i’s economy in June.
In the statewide report released Sunday the UHERO researchers said:
“Hawai‘i’s economic prospects continue to look good. Both job and real income growth will finish the year with greater than two percent gains, and there is plenty of momentum heading into 2005.”
Bonham and Gangnes said that while the Japanese visitor arrivals haven’t quite turned around, visits to Hawai‘i by Mainland visitors are more than making up the difference.
They also expect the construction industry to continue a strong turn around as compared to the first six months of the year.
Looking into the future, they warned of a slowing of job creation due to influences outside of Hawai‘i: “Over the next two years the economy will remain healthy, with a slowing of job growth as the expansion runs up against capacity constraints and a slower external environment.”
They added: “The external economy remains favorable, if not as buoyant as a year ago. Both the U.S. and Japanese economies passed through a slow patch this summer, but have maintained moderate growth. The global business cycle will probably peak this year with some slowing thereafter. Persistently high or rising oil prices and a poor international security situation pose the biggest risks.”
Hawai‘i’s unemployment rate, which is the lowest in the United States at about three percent statewide in the last half of this year, will rise slightly, while there will continue to be a tight labor market in Hawai‘i.
Watch for the tens of millions of dollars in military construction scheduled for O‘ahu to spark the state’s economy in the next several years, they added.
The statewide visitor arrival count should top seven million for the first time, too, the UHERO researchers said.
Visitor accommodations and hospitality industries are showing strong gains they said.
The return of troops now stationed in Iraq early next year may not be as strong a stimulus to the economy as expected, the researchers reported, with the conflict in Iraq continuing.
Rising energy prices and higher home prices and rents are sparking a slight upturn in inflation, the report said. Holding back the economy will be “home affordability problems, concerns about income inequality, and infrastructure limitations.”
They are also concerned about what another terrorist attack in the United States on the scale of the September 11, 2001 attack on America might do to Hawai‘i’s economy.
“The escalation of violence in Iraq, Russia and elsewhere suggest that the risk of another major terror attack may have increased, although the safe passage of the election season and the opportunity for progress in the Middle East are encouraging,” the report states.
On the Web: uhero.isdi-hi.com
