University of Hawaii study predicts slow economic recovery for stateBy AP
Friday, March 26, 2010
UH study predicts slow economic recovery for state
HONOLULU — A University of Hawaii study released Friday found signs of economic recovery for the state but also determined that the pace will be slow.
In its latest quarterly report on Hawaii’s economic condition, the University of Hawaii Economic Research Organization indicated that employment is stabilizing, tourist arrivals and spending are looking slightly better, and private construction is poised to improve as a result of federal and state spending programs.
“Hawaii’s economic recovery has begun,” the report said.
“Stirrings of private sector recovery and the short-term impulse from government contracts will lead to net hiring in coming months,” it added. “Overall construction spending will be 17 percent lower this year than in 2009 but will rise more than 4 percent in 2011.”
Moreover, the state’s vital tourism industry is displaying positive signs, the study said. For example, airlines are initiating or adding flights and larger aircraft to Hawaii routes, including Continental Airlines Inc., Korean Air, Canadian airline WestJet and Alaska Airlines.
But the study also concluded the pace of economic recovery will be slow, constrained by tepid domestic consumer spending and the impact of difficult budget conditions facing federal and state governments.
It also forecast low inflation and stagnant wages in Hawaii in coming years.
But while furloughs and pay cuts of government employees are causing a drag on the state’s economy, state revenues appear to be a bit healthier than previously estimated by the state Council on Revenues, the report stated. Those will improve further as the economy regains strength, it added.
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