On Feb. 10, the Economic Research Organization at the University of Hawaii (UHERO) released an update of its study of the state's economy in 2011.
The report concluded that Hawaii went through a "stop-start" recovery in 2011 and termed it a "disappointing" year. However, the researchers stated they are much more optimistic about 2012.
The obvious brightest spot is the visitor industry. Despite a slight lull midyear, visitor counts and spending picked up strongly in the fourth quarter of last year. For the year, arrivals were up 3.5 percent over 2010 and spending was up 15.6 percent. UHERO is predicting a 4.1 percent increase in arrivals in 2012.
Other sectors of the economy were not so strong. Construction picked up on Oahu, adding a net gain of 1,500 jobs. But the Neighbor Islands showed a 13 percent drop in construction employment from the previous year.
The report said residential real estate had not yet stabilized by the end of the year and concluded, "Home prices are expected to remain soft for the next year or so, until economic conditions improve and the foreclosure overhang is worked through. Once that begins to happen, the dearth of new building will set the stage for resumed price appreciation."
But the researchers believe the overall economy will improve. They expect payroll jobs to increase by 1.8 percent in 2012 and 2.3 percent in 2013. Unemployment should drop from December's 6.6 percent statewide to 6.2 percent in 2012 and 5.5 percent in 2013.
The report concludes on a positive note:
"All in all, we are cautiously optimistic that 2012 will be a better year in the Islands as we begin to transition to a more satisfactory growth path."
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