UHERO more bullish on Hawaii economy
HONOLULU (HawaiiNewsNow) - Are neighbor islands finally ready to catch the wave of recovery? A new University of Hawaii forecast says it's already happening, and gives a timetable for prosperity.
"Oahu continues to be further along in recovery, but the neighbor islands are catching up fast," says a report released Friday by UHERO, the UH Economic Research Organization.
Replacement of jobs lost in the recession will be completed on Oahu this year, on Maui next year, and in 2014 on Kauai and the Big Island, the report says.
The forecast calls for a 6.3 percent increase in Oahu visitor arrivals this year, enough to push the limits of Oahu hotel capacity, with roughly 8 percent improvement on neighbor islands where there is more spare hotel room capacity to sell.
"Hotel occupancy rates will climb to historic highs over the next few years, putting pressure on room rates and limiting further arrivals gains," the report says.
Paul Brewbaker, an independent economist who recently researched a white paper for Hawaiian Airlines, has come to the same conclusion, and sees hotel room capacity as capping economic growth at some point.
"Capacity has never been stretched thinner," said Brewbaker in an email. "If we can't stuff more bodies into rooms that are not expanding in number, then why would you fly more seats to Hawaii? I mean, I'm not speaking for any of the airlines, it just stands to reason."
UHERO predicts more jobs and more real personal income - that means, after dialing out inflation - on all islands, with income rising the most on Maui. Payroll jobs will rise 2.4 percent on Oahu but moor than 3 percent in the other three operating counties, the forecast says.
The forecast says construction "moved off bottom" last year and after years of dragging the recovery will be contributing to it, especially with the condo boom aborning on Oahu.
John White of the Pacific Resource Partnership told a ThinkTechHawaii conference on housing issues Thursday at the Plaza Club that Oahu needs a third more homes for projected population, while economist Paul Brewbaker and developer Stanford Carr predicted builders would move as fast as the state permitting process allows to meet that demand while interest rates are low.
Interisland cargo down
In a contrary economic indicator, Young Brothers reported Thursday that its first quarter cargo volume interisland was down 3.9 percent.
"We believe that some local businesses, particularly those on the neighbor islands, are still being very cautious," said Glenn Young, Young Brothers president.
Cargo was up to Nawiliwili (Kauai) and to Molokai and Lanai, but down 5.8 percent to Kahulkui, down 6 percent to Hilo, and down 12.3 percent to the west Hawaii port of Kawaihae.
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