HONOLULU — University of Hawai‘i economists said they were “cautiously optimistic” about the year ahead following a “disappointing 2011,” according to a fourth-quarter report published Friday on the website of the University of Hawai‘i Economic Research Organization, better known as
HONOLULU — University of Hawai‘i economists said they were “cautiously optimistic” about the year ahead following a “disappointing 2011,” according to a fourth-quarter report published Friday on the website of the University of Hawai‘i Economic Research Organization, better known as UHERO.
“The fourth quarter in Hawai‘i ended with the same mixed results that typified 2011. Visitor arrivals and spending surged at the end of the year. But in the broader economy, job growth remained anemic and the unemployment rate worsened,” the report stated.
“With signs of life in the U.S. economy overall, Hawai‘i’s fitful recovery will gain a bit more ground in 2012. The external economic environment has improved somewhat in recent months, although large risks remain,” the economists wrote.
One of those risks outlined by the report is the potentially adverse effect of rising oil prices, which has been trading near $100 per barrel — below last April’s $110 price tag but a big jump from September’s $86 price.
“Pricey oil will restrain visitor growth,” the report stated, tempering its otherwise sunnier report on rising numbers of visitor arrivals, increased visitor spending and an uptick in visitor industry employment.
O‘ahu fared better in construction, with a net gain of about 1,500 jobs since mid-2010, the report said, but “Neighbor Island construciton continues to slide, with no sign of a slackening in the pace of contraction.”
For the first three quarters of 2011, “government contracts awarded were off a staggering 67 percent,” the report stated.
Drawing on 11 months of information from 2011 compiled for the report, researchers wrote that residential real estate prices were down 9 percent on Kauai and 5 percent on the Big Island. Sales were basically flat on Kaua‘i, even though they were up by more than 7 percent on the Big Island. The Honolulu median single-family home price will be “essentially flat” until 2014, the report projected.
Payroll job counts ended 2011 with a 1.2 percent gain, and the report projects payroll jobs to expand 1.8 percent this year, “firming to 2.3 percent in 2013.”
The report projects statewide unemployment to average 6.2 percent this year and 5.5 percent in 2013.
“The year 2011 brought a few positives in the form of O‘ahu construction stabilization and a late-year rebound of visitors from earlier lows. But it would be hard to sugarcoat what was a bitter year overall,” the report states.
“Hawai‘i’s labor market deterioration was particularly disheartening considering the incremental gains that have been seen in the U.S. as a whole. Conditions abroad are a mixed bag: Strong recent overseas arrivals provide hope, while the European crisis looms dangerously,” the report states.
For more information, visit www.uhero.hawaii.edu.
