UHERO Forecast for the State of Hawaiʻi: Mild recession and weak recovery in 2026

Hawaii’s economy continues to edge into a mild recession. A tourism downturn is now underway, and job losses will occur in a number of sectors in 2026. Inflation, while currently low, will rise next year as tariffs continue to pass through to consumer prices. Construction remains the one consistently strong sector, supported by major new federal contracts and ongoing housing and infrastructure needs.