There’s a little more optimism about Hawaiʻi’s economy, mostly thanks to an increase in visitor spending — though federal policies continue to muddy that outlook.
In the University of Hawaiʻi Economic Research Organization’s latest economic outlook released Friday, researchers said the state “is moving beyond last year’s mild jobs recession.”
UHERO estimates Hawaiʻi’s real GDP to grow about 1.6% this year.
During the first half of last year, about 4,000 jobs in Hawaiʻi were lost because of its slowly recovering tourism industry, along with federal-level cuts.
The “weak labor markets, moderate income growth, and high prices,” according to UHERO, have held back consumer spending for those with lower incomes. And while there’s also been a slight drop in the number of visitors to the state, higher-income tourists spent more in the second half of the year.
“This (increase in visitor spending) was a little more persistent than we thought, but it’s overcome that softness which we saw in the first half of last year,” said UHERO assistant professor Steven Bond-Smith.
Normal visitor spending habits are expected to return eventually, though the current dependence on high-income earners in the meantime could be risky.
“You've seen some of the volatility in the stock market of late, whether it's because of the administration coming right back out and announcing they're going to renew tariffs or if it's because of fears over AI either being too successful or not successful enough,” said UHERO Executive Director Carl Bonham.
The volatile tariff structures being shoehorned by the Trump administration have disrupted businesses, and UHERO said it’s “too soon to know the effects of the recent Supreme Court decision invalidating the Administration’s broad tariffs.”
That Supreme Court decision came on Feb. 20. After that, the president announced new global tariffs — adding to that volatility.
