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Weak recovery predicted


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POSTED: Friday, May 15, 2009

Hawaii's economy, mired in its deepest recession since statehood, will not begin to see recovery until next year, and even then the results will be largely anemic, according to the latest forecast released today by the University of Hawaii Economic Research Organization.

“;Jobs are going to be hard to come by for the next few years, and those that do have jobs are not going to see as much income growth,”; said Byron Gangnes, director of UHERO's Hawaii Economy Group, who co-authored the report with four other economists.

The widespread global recession has extracted a toll on Hawaii's lead visitor and construction industries, which have experienced corresponding downturns, Gangnes said. And, while conditions are poor on Oahu, the neighbor islands have borne the brunt of the recession, he said.

The current downturn will be steeper than those previously faced in Hawaii; however, it is not likely to be as spread out, Gangnes said.

“;Still, it's hard to be very optimistic about this recovery because we know what kind of damage was done to American households and their budgets,”; Gangnes said. “;When recovery happens, we aren't likely to see the kind of robust growth that we saw in this decade.”;

Recovery will take longer on the neighbor islands because the recession there is deeper than what we have seen statewide, he said.

Statewide tourism will see additional losses in 2009, with a weak recovery beginning next year, Gangnes said.

“;It will take many years for Hawaii visitor numbers to recover to their previous peak because of anemic U.S. consumer spending and the lost interisland cruise ships, which we do not expect to return any time soon,”; he said.

After stabilizing this year, all counties will see modest growth in arrivals in the 2010-2011 period, but tourism will lag for years, Gangnes said.

While the booking window for trips to Hawaii had shortened during the economic downturn, visitors have begun to make 2010 plans, said Bob Froio, vice president for Condominium Connection, one of Hawaii's niche wholesalers.

“;People are getting fed up with not going on vacation, and they are anticipating that things will improve by then,”; Froio said.

It might take longer for Hawaii's construction industry to improve, Gangnes said. Construction will continue to contract for several years, with the most severe adjustments occurring on the Big Island and Maui, he said.

Job losses will continue to be widespread in all sectors in all counties, and real personal income, the best summary measure of economic activity on Hawaii, will drop, too, the report said.

“;There's a vicious cycle between job losses and contractions in the overall economy,”; Gangnes said.

               

     

 

By the numbers

        Percentage change from the previous year:
       

State

       

       

                                                                                                                                                                                                                                                                                                                                           
 20092010
               
Visitor arrivals-4.4%+1.6%
Payroll jobs-2.5%-0.2%
Real personal income-2.1%+0.2%

       

       

Oahu

       

       

                                                                                                                                                                                                                                                                                                                                           
 20092010
               
Visitor arrivals-5.3%+1.2%
Payroll jobs-2.0%-0.2%
Real personal income-1.6%+0.2%

       

       

Big Island

       

       

                                                                                                                                                                                                                                                                                                                                           
 20092010
               
Visitor arrivals-8.3%+3.1%
Payroll jobs-3.9%-0.1%
Real personal income-3.0%0.0%

       

       

Maui

       

       

                                                                                                                                                                                                                                                                                                                                           
 20092010
               
Visitor arrivals-10.2%+2.7%
Payroll jobs-4.4%-0.3%
Real personal income-4.0%-0.4%

       

       

Kauai

       

       

                                                                                                                                                                                                                                                                                                                                           
 20092010
               
Visitor arrivals-6.2%+5.2%
Payroll jobs-3.7%+0.3%
Real personal income-3.3%0.0%

       

       

Source: University of Hawaii Economic Research Organization