Expansion intact, but counties poised for slower growth

UHERO, May 10, 2024

Hawaii’s economy will continue to grow, but at a slower pace than in past years. Maui rebuilding and the incremental return of international travelers will support tourism, helping to offset a moderate pullback in the US mainland market. Construction will continue to be a source of strength, even as overall job and income growth decelerate. Reducing inflation in the Islands will take a bit longer than expected. Growth prospects for Hawaii’s counties differ. Maui is set for an extended recovery period this decade, while population slowing will reduce future growth to varying degrees across the counties.

Forecast

Forecast Figures

HNN: UH report paints bleak picture for state’s economy as Maui struggles to recover

Personal income in Hawaii might contract this year

SA: … A shrinking population and a weak labor force will constrain Hawaii’s economy this year and cause inflation-adjusted personal income growth to slow along with broader measures of economic health.

That was the opinion of University of Hawaii Economic Research Organization Executive Director Carl Bonham, who discussed UHERO’s second-quarter forecast Thursday during a news conference.

UHERO expects Hawaii’s real personal income will slow below 1% this year and that real gross domestic product will drop from 3.6% growth in 2023 to 1.5%. GDP is the inflation- adjusted calculation reflecting the value of all the goods and services produced by an economy in a given year, so a decrease signals that an economy is shrinking.

Meanwhile, UHERO has raised its inflation forecast for the year to over 4% and is anticipating that the payroll job situation and tourism will be a bit worse than previously anticipated….

UHERO’s report does not even take into account the potential economic disruptions from Maui or other counties passing new land-use restrictions for vacation rentals, which in recent years have represented much of the growth in lodging units.

Population changes, which have reduced government revenue, also are factoring into economic health, he said.

“Oahu has been losing population for several years now, and our forecast is for that to continue to be very, very stagnant,” Bonham said. “Our forecast for Maui is a 3,000- or 4,000-person loss of population between 2023 and 2024 and a very slow recovery.”

He said in contrast, Hawaii island has seen the most population growth.

“It shouldn’t be a surprise that the county with the most population growth is also the county that has added the most housing units and has sort of the most affordable housing situation of any of the other counties,” he said….

read … Personal income in Hawaii might contract this year

HNN: Business Report: Hawaii population decline (youtube.com) 

HNN: UH report paints bleak picture for state’s economy as Maui struggles to recover