UHERO: Better Economic Performance Forecast
There is still room for the economy to grow in Hawai’I County and across the state, according to the Economic Research Organization at the University of Hawai’i.
Last week’s study showed that tourism hasn’t topped out, despite big declines in Japanese visitor arrivals to the Big Island and other portions of the state over the last two years. UHERO forecasts an 8.1 percent drop in visits from Japanese tourists to the Big Island, but expects to make that up with international and U.S. mainland arrivals, forecasting a 2.7 percent increase in tourism for the island.
These gains in the tourism sector aren’t expected to last a long time. The summary by UHERO states that healthy gains are expected over the next few years on the neighbor islands, “before rising occupancy and costs begin to bring down growth rates, something that has already been seen on Oahu.”
For now, the Big Island and Maui are scheduled to see increases in seating on airline flights, upwards of 20-30 percent.
One sector that is holding things back on the Big Island is jobs in construction. Oahu and Maui are seeing an uptick in that industry, thanks to resort and retail projects. It is expected, however, that all neighbor islands should see a boost in residential activity thanks to some progress toward home price recovery.
UHERO’s forecast does not predict that the recent cutbacks at hospitals around the island will have a long-term impact, saying that “over the medium turn, the sector can be expected to rise to meet the needs of an expanding and aging population.”
Job growth is expected to continue over the next few years, helping spearhead a “healthy” growth in real income. The Big Island’s Real Personal Income is expected to grow by 2.7 percent in 2015 and 3.5 percent in 2016 before slowly leveling out.
To read a summary of UHERO’s findings, visit the organization’s website.