UHERO: Isle visitor traffic flat
Also, employment and real income will show slower gains in 2007
» Hawaii above average in 2006 GDP growth
Hawaii should expect no visitor growth again this year, while growth in employment and real income are lower than previous estimates. Inflation, meanwhile, will be slow to recede.
This was the latest forecast from the University of Hawaii Economic Research Organization, which first warned of an economic slowdown in March.
Study authors Carl S. Bonham and Byron Gangnes wrote that construction will continue to slow down, although it will be moderated by a surge in non-residential activity, which will prolong construction-related spending and jobs.
The visitor industry got off to a poor start this year, according to UHERO, meaning it can expect no annual growth -- or even a slight decline -- this year. The longer-term outlook isn't sunny, either, given the weak conditions in the U.S. economy.
UHERO says overall arrivals will be essentially flat this year, with 1.6 percent growth expected in 2008-2009. Visitor days, or length of stay, will decline by 0.5 percent this year, then strengthen to a little more than 2 percent growth in 2008-2009.
Job growth is expected to slow down in the face of a tight labor market, with non-farm payroll job growth expected at 1.9 percent this year compared to 2.5 percent last year -- with a further drop to 1.2 percent by 2009.
Inflation, meanwhile, is expected to recede gradually from the nearly 6 percent level recorded in 2006, Bonham and Gangnes wrote. Home-price appreciation between 2000 and 2006 continues to feed into consumer prices -- with the recent fuel price spike expected to contribute to upward pressure.
The Honolulu consumer price index is expected to rise by 4.8 percent this year, gradually cooling to 3.3 percent by 2009.
The overall outlook for Hawaii's county economies was also bleak. They should expect a "continued slowing along a path that has been evident since at least the middle of 2005."
However, UHERO says each county's pace of slowing will vary. Kauai and Hawaii counties will see the strongest visitor growth this year, though lower than last year.
By 2008, each of the four counties is expected to have slowed to a pace that is broadly consistent with sustainable trend growth.