The state will continue to see economic growth, but at a slower pace compared to previous years, according to the latest forecast from the University of Hawaiʻi Economic Research Organization, or UHERO.
The forecast shows that the state’s economic growth will come from construction activity including Maui recovery and a bump in international visitors.
However, Hawaiʻi is constrained by a shrinking population and a limited number of workers.
UHERO Executive Director Carl Bonham brought up a predicted exodus of more than 3,000 people from Maui.
“Longer term economic growth just depends on basic things, how much your labor force goes up or down and how productive those workers are,” he said.
“If Hawaiʻi's population is flat to down over the next decade and our forecast is essentially flat all the way out to 2028, then you're not going to have very much labor force growth at all. It's also aging, which also contributes to weaker labor force growth. So that means overall economic growth is just weaker.”
This means the economic forecast goes way up in the short term in 2025 because of rebuilding efforts. But it slows significantly in the long term.
Bonham added that the forecast was completed before the end of the legislative session. That means the report does not factor in the dramatic income tax cuts and short-term rental regulation that will result in lower tax revenue for the state.
