University of Hawaii economists report 2012 was a "strong recovery year" for Maui County's economy, and they predict "further robust expansion" over the next several years.
"The Maui County economy ramped up its pace of recovery last year, driven by buoyant tourism and the state's strongest job creation," the Economic Research Organization at the University of Hawaii said in a report released today. "Tourism demand from all major markets will provide one more year of solid visitor gains that will bring the industry to a high level of capacity use. Construction is now poised to make large and persistent contributions to the county's growth in coming years."
The economists forecast, however, that the growth in visitor markets will slow as demand for tourist accommodations reaches capacity.
Nevertheless, for now, tourism has largely reversed the losses sustained in the recession that began in the latter part of 2008, they said.
"Measured by visitor days, the number of tourists to Maui County is now higher than at the previous peak in 2007," the economists' report says.
Visitor arrivals are about 7 percent below peak levels, "partly because mid-2000s figures were skewed upward by short-staying cruise visitors," it says.
The economists foresee visitor growth buoyed by more available airline seats, despite some indications of possible pullbacks by major carriers.
Maui should see a 7.7 percent increase in visitor arrivals, topping last year's growth of 5.8 percent, the report says. "U.S. market growth will be a very strong 6.7 percent, and visitors from markets such as Canada, non-Japan Asia and Oceania will expand by more than 11 percent."
The economists predict that Japanese visitors, who make up a small percentage of Maui's tourism market, will increase by more than 5 percent.
The report points out that, for now, there are available hotel rooms for more visitors.
"Despite last year's solid gain in visitor days, the occupancy rate firmed only a couple of percentage points, to 72.6 percent for the year overall," the economists said. "This remains well shy of rates seen during previous periods of excellent industry performance and reflects in part some additions to the available accommodations stock over the past two years."
The report predicted that Maui's hotel occupancy rate will rise above 77 percent this year and settle near 78 percent in 2014-15, "just a bit below historical highs."
Maui County led all counties in job creation, improving to "a healthy 2.9 percent growth last year," the economists said. "We expect strong demand for labor across the broad local economy in 2013, with growth above 5 percent in trade, transportation and utilities. Accommodation and food services will expand by nearly 4 percent, and the job base will expand by more than 3 percent in finance, insurance and real estate, and the large 'other services' category. Health care will see modest growth, and government payrolls will be essentially flat."
While Maui County's unemployment rate has dropped below 6 percent, the economists attributed that, as in other counties, to people leaving the labor force.
But "as the economy continues to strengthen, employment gains will bring further improvement in the unemployment picture," the economists reported.
They also had encouraging forecasts for Maui's construction industry, reporting that the island's construction sector "moved off the bottom in 2012, after four straight years of losses."
"The number of jobs in the industry jumped more than 13 percent, by far the largest percentage gain among the four counties," they said. "Last year's surge in both residential and nonresidential construction permitting signals additional near-term gains. We expect the sector to build momentum quickly with job growth averaging more than 12 percent over the next three years."
The economists predict that the number of construction jobs in Maui County will grow from about 2,900 in 2012 to more than 4,100 in 2015.
* Brian Perry can be reached at firstname.lastname@example.org.