Economists: Hawaii’s economy will slow to near standstill

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.

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Information from: Honolulu Star-Advertiser, http://www.staradvertiser.com

2 Comments
  1. I saw a Vampire once September 21, 2019 4:12 am Reply

    Hawai’i is a tourist based industry. So the majority in unemployment will be from the tourist industry. Not included in this assessment is other industries. This is a smaller number of unemployed workers in comparison to the whole number of unemployed.


  2. harry oyama September 21, 2019 8:06 am Reply

    I am surprised Hawaii’s economy has not been bankrupted yet, considering the huge multi-billion dollars of unsustainable tax burden due to its black hole funding for the $10 billion dollar and counting Rail project, a request from Big Island to allocated $750 million to fix its lava destroyed areas, another $650 million to upgrade the Ala Wai basin flood project.

    And to continue funding the State bloated retirement pension system of over $5 billion not to mention the annual $1.2 billion to fund the Mirconesian influx support in medical, dental, education, housing for displacement from atomic testing, which is supposed to be a federally funded project.

    All we need is a hurricane to hit Oahu and watch society stoop down in a “dog eat dog” each man for himself environment when Hawaii’s economy bankrupts itself due to incompetence and massive corruption. I’m not the least worried because I receive my income through the military and Federal government.


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