Isle economy 'grinding to halt,' say UH experts
By Greg Wiles
Advertiser Staff Writer
Hawai'i's economy will slow to almost no growth this year as visitor arrivals decline and unemployment increases, though the state won't slip into recession, according to a new forecast from the University of Hawai'i Economic Research Organization.
In a forecast titled "Economy Grinds to a Halt," the research group says Hawai'i's economy will have little growth this year and next as the Mainland economy slumps and visitor numbers slip.
Hawai'i's economy has been slowing since booming earlier this decade, and many economists had forecast this to continue this year. But the UHERO report downgrades its previous forecasts, showing a decline in visitor arrivals for a second consecutive year and a slight decline in employment. It also forecasts personal income will have little growth when adjusted for inflation.
On the positive side, the report notes Hawai'i's construction industry is still doing better than Mainland counterparts and that it has limited exposure to the subprime mortgage crisis. The forecast shows Hawai'i's unemployment rate will rise but will still be significantly less than the national average.
The state still has a relatively high number of visitors.
"Characterizing this particular forecast was difficult for us," said Carl Bonham, UHERO executive director.
Forecast highlights:
"If you're one of the people that loses your job, you can't call that a half (glass) full story," Bonham said. But, "We don't think this is going to be a deep slowdown in the U.S. economy or Hawai'i's economy."
The report is a little less rosy than one issued last month by the state Department of Business, Economic Development and Tourism. That report lowered the gross domestic product for Hawai'i's economy to 2.5 percent this year from a prior projection of 2.8 percent.
Reach Greg Wiles at gwiles@honoluluadvertiser.com.
