The latest economic forecast from the University of Hawaiʻi Economic Research Organization (UHERO) is better than expected. The report anticipates the state’s financial well-being and recovery following the Maui wildfires.
Although the report states only about 1% job growth in 2024, flat visitor arrivals and reduced visitor spending, overall it is not an economic crisis.
“All of this is punctuated by the losses that happened on Maui,” Carl Bonham, UHERO executive director, said. “And what we’re saying is that those losses — they’re extremely consequential for Maui, they’re smaller than we thought they were going to be. And they’re not big enough to sort of derail the overall state economy.”
Bonham said UHERO was pessimistic in its previous forecasts, but data on visitor arrivals and unemployment have helped change economists’ minds.
Recent data shows unemployment is down 56.9% since September, 2023, in part because of high levels of Federal funds flowing into the island.
“There’s good reason to think that they found work because the family labor market was so tight before the fires and where they found work because of the recovery process, the work that’s going on by FEMA and Red Cross and nonprofits,” Bonham said
However, UHERO sees losing more Hawaiʻi residents as an issue.
“That’s an ongoing concern, particularly to the extent that we don’t deliver housing on Maui fast enough,” he said.
Bonham also sits on the Council on Revenues, which forecasts state tax collections. Their conclusions are used to build the state budget. Data shows growth in personal income tax, but weak general excise tax and transient accommodations tax revenue.
“It won’t surprise me if the revenue picture gets better,” Bonham said. “At the same time. I think legislators, particularly the House Finance and (Senate) Ways and Means (committees) are going to be pretty cautious. I think there’s going to be, you know, a concern about the potential for declining revenue.”
