{"id":188741,"date":"2023-12-15T00:01:26","date_gmt":"2023-12-15T10:01:26","guid":{"rendered":"https:\/\/www.hawaii.edu\/news\/?p=188741"},"modified":"2023-12-15T00:28:54","modified_gmt":"2023-12-15T10:28:54","slug":"uhero-fourth-quarter-forecast-2023","status":"publish","type":"post","link":"https:\/\/www.hawaii.edu\/news\/2023\/12\/15\/uhero-fourth-quarter-forecast-2023\/","title":{"rendered":"State facing headwinds, Maui recovery ongoing in <abbr>UHERO<\/abbr> forecast"},"content":{"rendered":"<span class=\"span-reading-time rt-reading-time\" style=\"display: block;\"><span class=\"rt-label rt-prefix\">Reading time: <\/span> <span class=\"rt-time\"> 3<\/span> <span class=\"rt-label rt-postfix\">minutes<\/span><\/span><figure id=\"attachment_181814\" aria-describedby=\"caption-attachment-181814\" style=\"width: 676px\" class=\"wp-caption alignleft\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.hawaii.edu\/news\/wp-content\/uploads\/2023\/08\/lahaina-wildfires.jpg\" alt=\"aerial of Lahaina fire damage\" width=\"676\" height=\"381\" class=\"size-full wp-image-181814\" srcset=\"https:\/\/www.hawaii.edu\/news\/wp-content\/uploads\/2023\/08\/lahaina-wildfires.jpg 676w, https:\/\/www.hawaii.edu\/news\/wp-content\/uploads\/2023\/08\/lahaina-wildfires-300x169.jpg 300w, https:\/\/www.hawaii.edu\/news\/wp-content\/uploads\/2023\/08\/lahaina-wildfires-130x73.jpg 130w\" sizes=\"auto, (max-width: 676px) 100vw, 676px\" \/><figcaption id=\"caption-attachment-181814\" class=\"wp-caption-text\">(Photo credit: <span aria-label=\"Hawaii\">Â鶹´«Ã½<\/span> Department of Land and Natural Resources)<\/figcaption><\/figure>\n<p><span aria-label=\"Hawaii\">Â鶹´«Ã½<\/span>\u2019s economy has been resilient in the face of weakening U.S. and global economies, high interest rates and the slower return of Japanese travelers. According to the <a href=\"https:\/\/uhero.hawaii.edu\/\">University of <span aria-label=\"Hawaii\">Â鶹´«Ã½<\/span> Economic Research Organization<\/a>\u2019s (<abbr>UHERO<\/abbr>) fourth quarter forecast for 2023, deceleration in key visitor markets will produce slower growth in 2024. But, absent a U.S. recession, moderate gains will resume in 2025. While economic fallout from the Maui wildfires has been somewhat smaller than feared, the rebuilding path will be long, and there are considerable uncertainties about how it will proceed.<\/p>\n<p>Key takeaways from the December 15 report:<\/p>\n<ul>\n<li>The U.S. has outperformed most advanced economies this year. High interest rates have weighed on investment, and the labor market has softened. Robust consumer spending will slow as excess savings dwindle, helping to bring inflation into the Fed\u2019s target range and achieve a &ldquo;soft landing&rdquo; 1.1&#37; growth next year.<\/li>\n<li>Canada and Japan\u2019s real gross domestic product contracted in the third quarter. The U.S. slowdown will restrain Canada\u2019s economy, while Japan\u2019s move toward tighter monetary conditions to combat inflation will ease pressure on the yen. Australia\u2019s inflation fight is proving difficult, and its exports have been weak as China deals with a property market meltdown. Global growth in 2024 will be similar to this year\u2019s tepid 3&#37; pace.<\/li>\n<li>The Maui visitor industry has been recovering faster than we anticipated, and visitors to the rest of the state have reached record levels. Japanese market recovery is taking longer, partly due to a very weak yen. This leaves <span aria-label=\"Hawaii\">Â鶹´«Ã½<\/span>\u2019s dependence on the U.S. market unusually high. The total number of visitors to <span aria-label=\"Hawaii\">Â鶹´«Ã½<\/span> will be essentially flat in 2024, before returning to moderate growth in 2025.<\/li>\n<li>Visitor spending has been fairly soft this year, primarily due to the disruption of high priced Maui tourism. Spending has risen on <span aria-label=\"Kauai\">Kaua&#699;i<\/span> and <span aria-label=\"Hawaii\">Â鶹´«Ã½<\/span> Island, as some travelers have substituted vacations on these islands. The weak yen is weighing on spending on <span aria-label=\"Oahu\">O&#699;ahu<\/span>, which has dipped below its pre-COVID peak. Overall real visitor spending will drop in 2024 and firm thereafter.<\/li>\n<li>Statewide payroll employment was rising at a modest pace this year, before being pulled down in the aftermath of the Maui wildfires. On Maui, there has been a more rapid than expected partial employment recovery, as some displaced workers have found alternative jobs in recovery or other work. Some have left the island. Overall, we expect <span aria-label=\"Hawaii\">Â鶹´«Ã½<\/span> job growth of about 1&#37; next year. Very slow population growth will mean only incremental trend job growth thereafter.<\/li>\n<li>Consumer price inflation has receded from its March 2022 7.5&#37; peak. Feedthrough of higher housing costs will keep inflation in the 3&#8211;3.5&#37; range for the next year, before a slow downward trend resumes. Incomes have been battered by inflation, but are now above pre-pandemic levels in real terms, and they will grow at a roughly 2&#37; annual pace. Real gross domestic product will slow below 2&#37; in 2024, before picking up in 2025.<\/li>\n<li>There remain a host of uncertainties surrounding Maui\u2019s future recovery path, including how fast residents can be moved from hotels to more permanent housing, the speed of ongoing cleanup work, the extent and duration of support programs, and how long and in what fashion rebuilding will occur.<\/li>\n<li>The home resale market is suffering from high mortgage rates, high prices, and a lack of inventory by homeowners reluctant to give up low interest rates. Maui rebuilding will drive further expansion of an already hot <span aria-label=\"Hawaii\">Â鶹´«Ã½<\/span> construction industry. Getting&#8212;and housing&#8212;the needed workers will be a challenge.<\/li>\n<\/ul>\n<p>&ldquo;While Maui\u2019s recovery remains top of mind, the state as a whole has continued to grow at a moderate pace, and only gradual slowing is expected,&rdquo; the <abbr>UHERO<\/abbr> forecast said. &ldquo;But, as always, <span aria-label=\"Hawaii\">Â鶹´«Ã½<\/span> is somewhat at the mercy of conditions beyond our shores. A sharper slowdown or recession in the U.S. mainland would mean a sharper slowdown in <span aria-label=\"Hawaii\">Â鶹´«Ã½<\/span> in 2024&#8211;25.&rdquo;<\/p>\n<p><a href=\"https:\/\/uhero.hawaii.edu\/uhero-forecast-for-the-state-of-hawai%ca%bbi-state-facing-headwinds-as-maui-recovery-begins\/\">Read the entire report on <abbr>UHERO<\/abbr>\u2019s website<\/a>.<\/p>\n<p><abbr>UHERO<\/abbr> is housed in <abbr title=\"University of Hawaii\">UH<\/abbr> M\u0101noa\u2019s <a href=\"https:\/\/socialsciences.manoa.hawaii.edu\/\">College of Social Sciences<\/a>.<\/p>\n<div class=\"responsive-video-wrap-post\"><figure class=\"wp-block-embed wp-block-embed-youtube is-type-video is-provider-youtube epyt-figure\"><div class=\"wp-block-embed__wrapper\"><div class=\"epyt-video-wrapper\"><iframe  id=\"_ytid_79706\"  width=\"676\" height=\"380\"  data-origwidth=\"676\" data-origheight=\"380\" src=\"https:\/\/www.youtube.com\/embed\/WTkPMws0exA?enablejsapi=1&origin=https:\/\/www.hawaii.edu&rel=0&autoplay=0&cc_load_policy=0&cc_lang_pref=&iv_load_policy=1&loop=0&fs=1&playsinline=0&autohide=2&theme=dark&color=red&controls=1&disablekb=0&\" class=\"__youtube_prefs__  no-lazyload\" title=\"UHERO Focus: 2023 Q4 Forecast\"  allow=\"fullscreen; accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen data-no-lazy=\"1\" data-skipgform_ajax_framebjll=\"\"><\/iframe><\/div><\/div><\/figure><\/div>\n<p><abbr>UHERO<\/abbr> Executive Director Carl Bonham provides a summary of <abbr>UHERO<\/abbr>\u2019s 2023 fourth quarter forecast in this episode of &ldquo;<abbr>UHERO<\/abbr> Focus.&rdquo;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>While Maui\u2019s recovery remains top of mind, the state as a whole has continued to grow at a moderate pace, and only gradual slowing is expected, according to the <abbr>UHERO<\/abbr> forecast.<\/p>\n","protected":false},"author":16,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[30],"tags":[301,197,1467,1363,1597,1600,1026,9,343,56],"class_list":["post-188741","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-research","tag-college-of-social-sciences","tag-economics","tag-manoa-excellence-in-research","tag-manoa-research","tag-maui-wildfires","tag-public-impact-research","tag-social-science","tag-uh-manoa","tag-uhero","tag-video-2","entry","has-media"],"aioseo_notices":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.hawaii.edu\/news\/wp-json\/wp\/v2\/posts\/188741","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.hawaii.edu\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.hawaii.edu\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.hawaii.edu\/news\/wp-json\/wp\/v2\/users\/16"}],"replies":[{"embeddable":true,"href":"https:\/\/www.hawaii.edu\/news\/wp-json\/wp\/v2\/comments?post=188741"}],"version-history":[{"count":4,"href":"https:\/\/www.hawaii.edu\/news\/wp-json\/wp\/v2\/posts\/188741\/revisions"}],"predecessor-version":[{"id":188796,"href":"https:\/\/www.hawaii.edu\/news\/wp-json\/wp\/v2\/posts\/188741\/revisions\/188796"}],"wp:attachment":[{"href":"https:\/\/www.hawaii.edu\/news\/wp-json\/wp\/v2\/media?parent=188741"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.hawaii.edu\/news\/wp-json\/wp\/v2\/categories?post=188741"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.hawaii.edu\/news\/wp-json\/wp\/v2\/tags?post=188741"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}