HONOLULU — Hawaii’s economy will likely slow to a near standstill in coming years, according to a new report published Friday.
Economic growth will be less than 1% in each of the next three years, the University of Hawaii Economic Research Organization forecast in the report.
“The outlook is for Hawaii to tread water over the next few years, vulnerable to waves that could well pull us under,” the report said, according to the Honolulu Star-Advertiser .
The report predicts Honolulu’s recent crackdown on illegal vacation rentals will likely hurt growth. It also cited weakened consumer spending after two straight years of population declines and concerns about U.S. and global economies will further weigh on growth.
These factors prompted UHERO to darken its outlook compared to its prior forecast in May. It now expects weaker results for jobs, personal income and visitor arrivals.
Economists expect a 1.2% statewide decline in the number of visitors to Hawaii next year and a 0.1% drop in 2021.
International travelers are expected to reduce their travel and spending because of a weaker global economy and a stronger dollar, which makes a Hawaii vacation more expensive, the report said.
UHERO said international visitor spending in Hawaii, when adjusted for inflation, is down about 9% this year.
Hawaii residents are also depressing growth by moving away.
The report said the local population fell in each of the last two years, which cuts into consumer spending. UHERO said the last time there were two consecutive years of population loss in Hawaii was during the 1950s.
One strong area is the construction industry. The organization expects “modest” growth in construction over the next several years.
Hawaii’s unemployment rate is predicted to rise to 3.2% next year from 2.8% this year.
Unemployment around 3% is still considered roughly full employment, so employers will still be pressed to find good workers and be competitive with pay.
Information from: Honolulu Star-Advertiser, http://www.staradvertiser.com