UHERO State Forecast Update: Hawaii's Growth Down, But Not Out
From UHERO, September 21, 2018
Hawaii’s expansion has slowed along several dimensions. On top of the painful human toll, volcanic activity and flooding have dealt a setback to tourism. The construction sector has continued to drop back from its 2016 peak, and job growth has slowed to a near-stop. Still, the fundamentals look favorable. Global tourism continues to power forward, and there remains a healthy pipeline of construction work. And even with the recent labor market weakness, Hawaii continues to enjoy its lowest unemployment in many years.
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Tourism (but not much else) is booming in Hawaii. Here's why that's a problem
HNN: …researchers point out that almost all of the growth in the economy remains in tourism. That means Hawaii is even more dependent on the fate of the mainland economy.
The report looked at economic data for the first six months of 2018.
Economics Professor Carol Bonham said Hawaii growth has either stopped or reversed in most sectors, including construction, military and government employment, while tourism grows despite a slight impact from the Hawaii Island eruption and devastating storms there and on Kauai.
“What we are seeing is lots of growth in accommodations and food service jobs and not a lot of growth in most of the rest of the economy,” Bonham said.
Meanwhile, he points out the economic boom on the mainland is much more robust, attracting Hawaii residents away to greener pastures.
“People who live in Honolulu who may be aren’t real happy about how expensive it is to live here they have great opportunities elsewhere,” Bonham said.
The out-migration may be responsible for other trends, including falling rents, possibly due to less demand, and fewer people available to fill non-tourism jobs that do open up.
“So those things all sort of mesh together,” Bonham said. “Less population growth, slower job growth, lower inflation, decline in rents.”
As a result the overall economy will grow less than 1 percent, UHERO predicts…
read … Tourism (but not much else) is booming in Hawaii. Here's why that's a problem