Tourism is booming in Kohala, one of several bits of good news economist Jack Suyderhoud highlighted Thursday during the 40th annual First Hawaiian Bank Economic economic outlook forum.
“In talking with the people who are on the ground here, the hotel bookings are really good,” Suyderhoud said prior to his formal presentation at the Waikoloa Beach Marriott Resort &Spa. “It’s a great destination. People with money are finding the properties here attractive.”
Those people are visiting and buying property in Kohala, Suyderhoud said.
Tourism arrivals had dropped off some at the end of 2013, he said, but the numbers began to rebound in July. Of note, Suyderhoud said, was that even in some months when Hawaii Island’s arrival numbers were down compared to the year before, spending was up.
In general, though, visitors here are not big spenders.
“You’ve got an event now, the lava flow,” he said. Such a flow has “an impact equal to a tropical storm in super slow motion. It’s a natural attraction, human nature being what it is.”
While the lava flow, which has slowly approached Pahoa, may prompt more visitors to book a helicopter tour, for example, even the national coverage of the event probably isn’t enough to convince travelers headed to, say Cozumel, to switch their flights to Kona, Suyderhoud added.
Another natural disaster, Tropical Storm Iselle, may end up spurring on job growth in one of Hawaii Island’s other marquee industries, construction.
“Even before Iselle and the lava flows, it was hoped that construction would make up for the slowing tourism sector, and to an extent it has done so,” Suyderhoud said.
Puna residents may hold off a bit in repairing some of the Iselle damage, while they await the outcome of the June 27 lava flow, Suyderhoud said.
Building permits islandwide continue to increase, Suyderhoud said, another good sign for the county’s economic recovery.
“The recent upswing suggests construction may finally be breaking out,” he said.
Statewide, though, only about 3,600 of the 11,000 construction jobs lost during the recession have been recovered. For the Big Island, 900 of the 3,000 jobs lost have returned.
Statewide unemployment is nearing 4.5 percent, while Hawaii Island’s remains above 5 percent, Suyderhoud said.
Nationally, the unemployment rate is 6.1 percent, a figure that looks good, but hides several other factors about the labor market, said Ken Miller, First Hawaiian Bank’s chief investment strategists and director of investment services.
When involuntarily underemployed people, those working part-time jobs who would rather be full-time workers, and the number of people who have given up looking for work, for whatever reason, are factored in, the rate increases to 12 percent.
That leaves “considerable slack in the job seeker market,” Miller said.
For decades, the trend has been to see more people leaving the job force. What economists don’t agree on, he said, is whether the situation now is a cyclical one, which can be resolved by waiting for the market to continue its upswing, or whether it is based on demographic and structural problems, such as a skills mismatch between available workers and available jobs.
“If you think there is a lack of supply (of skilled workers) but demand (for those workers), you’d expect to see wages growing,” Miller said. “There’s really zero real wage growth” from 2007 to 2014.
People surveyed in 2014 are also likelier to say it’s hard to get a job, as opposed to 2000, when people were significantly more likely to say jobs were plentiful, Miller said.
Taking a broader look at the national and international economies, Miller said to expect a continued period of above-trend growth, that inflation isn’t likely any time soon and a continued job market like the one facing workers today. That all might be bad news for job seekers, but is good news for the stock market.