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Economic Currents

Keep up to date with the latest UHERO news.

County Economic Forecast: Zero Growth Expected Statewide

To varying degrees, each of the four counties has shared in the state's broad pattern of slowing over the past several years, a process that became more pronounced in 2007. This synchronized slowing is no mistake, reflecting broad statewide—and even global—slowing trends in construction, visitor spending and overall economic activity. There are similarly common adverse developments that will influence the county economies over the next several years. This year, job and real income growth will fall in a fairly tight range around 0% in each of the four county economies. Our expectation is that it will be several years before the islands return to a moderate pace of economic expansion. 

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Annual Hawai'i Forecast: Economy Grinds to a Halt

The Hawai'i economy that powered its way through much of this decade slowed to a standstill in 2007. The drag from a weakening visitor industry and an unwinding construction cycle spread to the broader economy. A U.S. recession is now underway. The mainland slump, national credit market problems, and soft local fundamentals mean there will be little growth in Hawai'i for the next two years. Some sectors will see net job losses. Moderate growth is not expected to resume until 2010.

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Hawai'i Construction Forecast Update: Slow Decline But No Contracting Crunch

While the external environment has become decidedly more risky since last fall, this forecast makes only a small downward revision to the forecast path. Construction employment and income will slow to very small positive gains this year, before turning negative in 2009. Some downward drift in home prices will occur, but Hawai'i will avoid the large-scale contraction that is occurring in many mainland cities that must work off home price bubbles. The overall construction cycle will continue to be stabilized by relative strength in nonresidential segments of the industry.

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UHERO Hawai'i Quarterly Forecast Update: Cooling Economy Faces U.S. Headwinds

The weakening U.S. economy and the persistence of high energy prices lead us to mark down a bit our Hawai'i growth estimates for the end of this year and 2008. However, we do not yet see an end to the current long economic expansion. Moderate job growth will continue next year, and real income will recover to nearly 2% growth. The visitor industry, which saw modest declines in arrivals and sluggish spending this year, will be essentially flat in 2008 before strengthening U.S. and Japanese economies begins to resuscitate travel in 2009. As we noted in our recent global outlook report, risks to the world economy have risen, and this leaves Hawai'i more exposed should a broad mainland downturn occur. 

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UHERO Global Economic Forecast: Faltering American Economy Will Cause Global Slowing

The world economy began to slow in 2007, after peaking at nearly 4% growth in real gross world product in 2006. Slowing has been centered in the developed world, particularly in North America, where contraction in U.S. residential investment and fallout from the sub-prime mortgage collapse is taking a substantial toll. So far this weakness has not spread significantly to other countries. Prospects are for further global slowing in 2008. Now the question is how soft or hard the landing will be. While no sharp downswing is yet in evidence, the configuration of risks appears heavily weighted toward the negative.

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