{"id":197319,"date":"2024-05-10T00:01:48","date_gmt":"2024-05-10T10:01:48","guid":{"rendered":"https:\/\/www.hawaii.edu\/news\/?p=197319"},"modified":"2024-05-10T10:27:20","modified_gmt":"2024-05-10T20:27:20","slug":"uhero-second-quarter-forecast-2024","status":"publish","type":"post","link":"https:\/\/www.hawaii.edu\/news\/2024\/05\/10\/uhero-second-quarter-forecast-2024\/","title":{"rendered":"Counties poised for slower growth, inflation surpasses national average, 糖心视频ERO<\/abbr> forecasts"},"content":{"rendered":"Reading time: <\/span> 3<\/span> minutes<\/span><\/span>

\"buildings<\/p>\n

Hawaiʻi<\/span>\u2019s economy will continue to grow, but at a slower pace than in past years (much of the pre-pandemic period and the pandemic-recovery period). According to the University of Hawaiʻi<\/span> Economic Research Organization<\/a>\u2019s (糖心视频ERO<\/abbr>) second quarter forecast for 2024<\/a>, Maui rebuilding and the incremental return of international travelers will support tourism, helping to offset a moderate pullback in the continental U.S. 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, and growth prospects for Hawaiʻi<\/span>\u2019s counties differ.<\/p>\n

“Maui is set for an extended recovery period this decade, while population slowing will reduce future growth to varying degrees across the counties,” said the forecast.<\/p>\n

Key takeaways from the May 10 report:<\/p>\n

    \n
  • The U.S. has continued to outperform its peers, supported by immigration and strong consumer spending. Some moderation of U.S. growth will occur as the labor force softens and high short-term financing costs weigh on households. But considering the economy\u2019s impressive resilience, the extent of slowing will be less than previously anticipated.<\/li>\n
  • Other major visitor markets have struggled. The four counties have experienced somewhat differing visitor industry performance. All were affected by a first-half 2023 tapering of U.S. arrivals, which may have reflected waning post pandemic rebound travel. Maui has had a somewhat stronger than expected initial industry rebound, but faces a long road ahead. Other counties benefited from visitors substituting alternative Hawaiʻi<\/span> destinations.<\/li>\n
  • Despite challenges, inflation-adjusted statewide visitor spending rose last year, propelled by the strongest daily per person visitor spending in more than three decades. Room rates held steady after a period of substantial gains, while there was substitution away from the luxury hotel segment. Inflation-adjusted visitor spending will decline a bit this year, before stabilizing in 2025.<\/li>\n
  • The state government budget is taking a smaller hit from Maui wildfire cost than expected, but pending hazard pay for employees who worked during COVID-19 will be an added state and county outlay. Already, recent years\u2019 population decline has reduced revenue. The state legislature has passed the most ambitious tax cut and reform package in many years.<\/li>\n
  • Inflation has picked up in the islands, and it now exceeds the national average. This is primarily because of a delayed pass-through of higher rents. Inflation will resume its downward path over the next two years.<\/li>\n
  • Job growth continues at a modest pace in all counties other than Maui. Progress to house residents displaced by the Maui wildfires has been slow. A new law grants Maui and the other counties more authority to regulate or eliminate short term rentals.<\/li>\n
  • Across all counties, soaring mortgage rates caused a dramatic drop in existing home sales, but overall construction activity remains buoyant. Maui rebuilding and ongoing private and government projects, especially on Oʻahu<\/span>, will push construction employment to record highs.<\/li>\n
  • A significant new concern is the unfolding insurance crisis. The cost of condo insurance has soared nationwide because of more frequent catastrophic events. Most lenders will not issue new mortgages on under-insured properties. The state legislature has considered a public insurance pool to address these concerns, but this was not adopted during the recent term.<\/li>\n
  • Wage increases and declining inflation have raised real personal income, but it will slow below 1% this year. Real gross domestic product, our broadest measure of economic activity, will slow sharply from 3.6% growth in 2023 to 1.5% this year, but it will pick up in 2025 as Maui construction kicks into higher gear and external economies improve. As labor force and employment growth slow, both income and GDP<\/abbr> will trend lower than in the past.<\/li>\n<\/ul>\n

    糖心视频ERO<\/abbr> is housed in 糖心视频<\/abbr> M\u0101noa\u2019s College of Social Sciences<\/a>.<\/p>\n

    For the entire report, visit the 糖心视频ERO<\/abbr> website<\/a>.<\/p>\n