Slow but steady wins the race seems the motto for Hawaii County’s economy, as it builds incrementally toward levels lost during the Great Recession.
That’s according to a report being released today by the University of Hawaii Economic Research Organization, known as UHERO.
“Economic recovery is proceeding in Hawaii County. Job creation is ongoing, and Big Island families are beginning to see income gains after a long period of stagnation,” the report says. “Despite lingering weakness in residential construction, we can expect a period of relatively healthy growth across the economy over the next several years.”
Carl Bonham, UHERO executive director, said Thursday that tourism is the first leg of the recovery, followed by construction. In Hawaii County, visitor growth hasn’t lived up to expectations, growing just 1.2 percent last year, following an 8.7 percent gain in 2012.
That should change this year, Bonham said, with estimates of 20 percent growth in direct flights expected during May, June and July at Kona International Airport alone.
“2013 was a little bit of a disappointing year,” Bonham said, “but I think there is some reason for optimism.”
Job growth occurred in nearly every major sector of the Hawaii County economy last year, although the extent of these gains varied widely.
A 6 percent jump was seen in the large “other services” sector, primarily related to growth in administrative and waste management services. Transportation and utilities rose more than 4 percent.
UHERO researchers expect job growth in the 1 to 2 percent range for the remainder of the year.
Mayor Billy Kenoi took the UHERO report in stride.
“We see very encouraging economic news. … We also see some uncertainty and some challenges,” Kenoi said. “But we don’t want to see a boom that will lead to a bust. We want to see a measured, modest and sustained economic recovery.”
The UHERO report comes on the heels of a release Thursday of U.S. Census Bureau updates that show Hawaii County led the state in the percentage increase in housing units between April 2010 and July 2013. The Big Island’s 2.6 percent increase, while small, was still double rates of increase in Honolulu and Maui County (1 percent), and Kauai County (1.3 percent).
Hawaii County in July 2013 had 84,445 housing units, compared to 340,392 in Honolulu County, 71,231 in Maui County and 30,189 in Kauai County, according to calculations of the Census data by the Hawaii Department of Business, Economic Development &Tourism.
The construction sector added almost 400 jobs last year, a 13 percent increase, according to the UHERO report. But inflation-adjusted residential permitting continues to languish at levels less than one-fifth of its 2005 high, and 44 percent below the average of the past 20 years, according to UHERO.
“We anticipate mid-single-digit growth this year and next, with a more rapid acceleration by 2016, bringing the number of construction jobs in the county to 4,300 that year, up from about 3,000 at the bottom of the cycle back in 2011,” researchers said. “The current upswing will be far more restrained than the last: late in the decade jobs will peak at about 4,800, compared with 5,800 at the height of the housing boom fueled expansion of the 2000s.”