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Products: Forecasts

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County Economic Forecast:
Counties Share Strength and Concerns

The robust outlook for the state economy is shared to varying degrees by each of the four counties. The county economies will all experience healthy growth in jobs and income this year, followed by gradual deceleration in the face of very tight labor markets and other capacity constraints.

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Hawaii Economic Forecast Update:
2005 Growth Revised Upward

UHERO’s Hawai‘i forecast for 2005 has been revised upward. This reflects newly-available data for the fourth quarter of 2004 and the first quarter of 2005, as well as upward revisions by the U.S. Bureau of Economic Analysis to their 2004 state income figures. As a result, visitor arrivals, employment and income growth are now expected to be a bit stronger than the figures we reported in our March Annual Hawai‘i Forecast report. We continue to expect gradual slowing of the economy as capacity constraints begin to bite.

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Annual Hawaii Construction Forecast:
The Cycle is Alive and Well

From its trough in the late 90s Hawai‘i construction activity has grown for seven years. This report predicts that growth will continue, resulting in the longest uninterrupted expansion since the 1960s. Forty years ago, the impetus of newly-achieved Statehood and a dramatic decade of in-migration set the tone for Hawaii’s growth for the next half century. More modest growth in construction activity during the current expansion, along with uneven participation across residential, nonresidential, and public sector construction, has set the stage for a more prolonged expansion than in prior cycles. Still, the investment cycle is alive and well. The UHERO Annual Construction Forecast predicts continued growth and discusses the probability of a cyclical turning point further in the future.

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Annual Hawaii Economic Forecast:
Economy Poised for Another Banner Year

Hawai‘i is set for a continuation of last year’s robust growth. 2004 was a great year for the tourism industry; this year should be even better. Construction industry strength continues, even if the residential boom may be peaking. Job and income growth accelerated in the second half of last year, and further gains are likely in 2005, with some deceleration as we head into 2006.

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Global Economic Forecast:
World Outlook Good, But Oil and Deficits Are Worries

The global expansion is running up against the biggest energy price increases in many years. While nothing like 1970s stagflation is expected, high oil prices have slowed the economy moderately. The global business cycle will peak this year, but with healthy growth continuing in 2005. Unlike past business cycle expansions, China has joined the U.S. as an important engine for global growth.

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Hawai'i Economic Forecast Update:
Robust Growth and Inflation Will Continue in 2005

Hawai'i's economic prospects continue to look good. Both job and real income growth will finish the year with greater than 2% gains, and there is plenty of momentum heading into 2005. The Japanese visitor recovery has been a bit more attenuated than we expected a year ago, but U.S. mainland visitors have taken up any slack. While income growth in construction has been weaker than expected in the year's first half, we expect the industry to be a substantial support for growth over the next several years. Persistent high energy prices have taken a bit off performance this year and will continue to act as a drag on the economy. Over the next two years the economy will remain healthy, with a slowing of job growth as the expansion runs up against capacity constraints and a slower external environment.

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Annual Hawaii Construction Forecast:
Moderate But Stable Growth Ahead

Construction in Hawai'i is poised to continue growing for the next several years at a moderate pace. The forecast for 6.2 percent growth in contracting receipts this year continues the pattern of slow but sure expansion. Military projects will "step up" the construction growth trajectory to a higher level. As a result, the current construction cycle is looking more sustainable than the late 1980s cycle.

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Hawai'i Economic Forecast Update:
Tourism Adds to Hawai'i Expansion

Hawai'i 's economic expansion is now mature. Tourism has joined construction and the service sectors to create broad-based economic strength. Our outlook sees continued strong growth for the next two years, but also an evolution away from residential housing as a key engine for growth. Constraints to growth have once again become apparent.

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Hawai'i Economic Forecast:
Expansion Remains Solid

The Hawaii economy continues to grow strongly. A hot housing market and associated construction spending support expansion in jobs and income, despite a less-than-complete recovery the Japanese tourism market. Plans for military spending will provide support for the construction industry over the next several years. Together with an improving external environment, these factors promise continued strong growth.

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Hawai‘i Economic Forecast:
Strong Expansion to Continue

Believe it or not, 2003 marked the seventh straight year of economic expansion as measured by growth in state real (inflation-adjusted) personal income. All but one of these years saw real growth of two percent or better. While the labor market turned down after 9/11, state job counts have since rebounded strongly. Conditions look good for continued growth through the coming two years.

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Construction Forecast:
Hawai‘i Construction on a Roll

Construction in Hawaii is on a roll. With 2003 the fourth consecutive year of growth, its all upside for the year 2004. After growing more than 13% during 2002, we expect construction spending growth to slow slightly to 7% in 2003 followed by a surge to over 17% the next year.

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Hawaii Economic Forecast:
Construction to Fuel Strong Growth

There’s just no stopping this economy. Little more than six months after the outbreak of the War in Iraq, economic growth in Hawaii continues unabated. While the tourism industry is not wholly recovered, it has shown surprising resilience. And, buoyed by strong construction and housing, the broader economy has moved to new recordhigh job counts and levels of personal income. With permitting activity high and major military housing projects soon to get under way, construction will continue to grow in the coming year. Combined with gains in tourism, this will support healthy expansion for the Hawaii economy.

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Hawaii Economic Forecast Update:
Hawaii Expansion to Continue Despite Japanese Weakness

Weak Japanese travel continues to be a challenge for the state’s number one industry. For the past threemonths, the Japanese visitormarket has struggled to climb back from the sharp drop that accompanied the war in Iraq and the outbreak of Severe Acute Respiratory Syndrome (SARS). At the same time, the mainland visitor market has been robust, and increases in lengths of stay have helped to generate modest increases in broad measures of visitor industry activity. Except for areas that are heavily dependent on Japanese tourism, this is shaping up to be a fairly good year for the visitor industry.

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Hawaii Economic Forecast:
Post-War Tourism Struggle Won't Derail Economy

For the second time in 18 months, Hawaii is faced with a dramatically worsened external environment. Even before the outbreak of war in Iraq, war jitters had begun to chip away at the steady recovery progress of island tourism. Since the onset of hostilities, Japanese travel in particular has fallen sharply. And even as news from the front began to raise hopes for a speedy stabilization, the mushrooming Severe Acute Respiratory Syndrome (SARS) threatens to suppress Japanese arrivals here for many months. The environment for tourism has turned from bad to worse.

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Hawaii Economic Forecast:
Recovery Continues Despite Tourism Woes

Hawaii’s economy is on the road to recovery, but there is still plenty of unfinished business. The strength in U.S. mainland visitors has helped the tourism sector avoid a disastrous year, but the Japanese side continues to fall short of pre-recession levels. Few of the tourism jobs lost after 9-11 have returned. While the broader economy fares better, with a partial recovery in the non-ag job count, we have yet to see net gains in employment. In fact, extraordinary strength in several domestic sectors, such as the housing market and some service areas, means that Hawaii has maintained real income growth throughout this two-year economic downturn.

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