Hawaii\u2019s red-hot construction industry represents the only bright spot in an otherwise somber economic outlook heading toward the end of the year, with even more bad employment and economic expectations to come next year, according to the latest forecast from the University of Hawaii\u2019s Economic
\nResearch Organization.<\/p>\n
\u201cIt\u2019s a little bit of a bleak outlook \u2014 not a lot to be optimistic about,\u201d said UHERO Executive Director Carl Bonham.<\/p>\n
UHERO\u2019s third-quarter economic forecast outlines a long list of forces \u2014 many driven by Trump administration policies \u2014 that are expected to lead to more job losses, rising costs and a \u201cmild recession\u201d for
\nHawaii that will affect everyone.<\/p>\n
But Trump administration changes to Medicaid and reductions in SNAP benefits will hit low-income Hawaii residents disproportionately, according to UHERO.<\/p>\n
\u201cThis remains an outlook that
\nwill inflict significant pain on some Hawaii residents, with the greatest costs to the lowest income households, including workers in tourism-related areas,\u201d according to UHERO. \u201cLaid off federal government workers will of course also suffer severe losses.\u201d<\/p>\n
Coming out of an expected Hawaii recession, UHERO expects a \u201cgradual recovery\u201d to follow in late 2026.<\/p>\n
Don’t miss out on what’s happening!<\/p>\n
Stay in touch with breaking news, as it happens, conveniently in your email inbox. It’s FREE!<\/p>\n
In between, according to UHERO, Hawaii should see \u201chigher prices and tepid growth (that) will impose ongoing costs on Hawaii households.\u201d<\/p>\n
If the U.S. Supreme Court allows President Donald Trump\u2019s tariffs to go through, the effect could drag down the importation of steel and lumber that also could cool construction in Hawaii.<\/p>\n
And, according to UHERO, \u201cInevitably, U.S. and Hawaii residents will be unable to avoid paying higher prices for many of the goods they consume.\u201d<\/p>\n
A typical, median-income family in Hawaii will see a \u201cpermanent
\nannual\u201d price increase of $1,400
\nannually because of tariffs, according to UHERO.<\/p>\n
The Trump administration already has eliminated 1,200 federal jobs across the islands this year, with more to come on Tuesday when temporary work extensions for targeted federal workers expire.<\/p>\n
\u201cMany sectors are now contracting, led by federal job losses and tourism sector declines,\u201d UHERO wrote. \u201cThe drop in federal jobs \u2014 down more than 1,200 already \u2014 will deepen as deferred resignations take effect at the end of this month.\u201d<\/p>\n
The result means \u201cHawaii\u2019s economic prospects remain poor,\u201d according to UHERO. \u201cIn Hawaii, visitor numbers are down, job growth has stalled, and housing activity remains weak. Inflation will rise over the next year as tariffs feed through to consumer prices. Construction remains the only major source of strength, supported by large federal contracts and other public projects. We will see a mild recession in the Islands over the next year, with the weakening U.S. economy threatening a potentially deeper downturn.\u201d<\/p>\n
Tourism will continue to struggle following a disappointing 2025 \u2014 especially from once reliable Japanese and Canadian visitors amid uncertainty over how the U.S. Supreme Court will rule on President Donald Trump\u2019s tariff proposals that have slowed the supply chain to and from the islands ever since Trump returned to the White House in January.<\/p>\n
\u201cAlthough some U.S. companies have tried to absorb tariff costs so far, ultimately they will have to pass on to consumers the lion\u2019s share of their increased import costs,\u201d according to UHERO.<\/p>\n
The effects of a sluggish tourism industry will continue to be felt in every island county.<\/p>\n
\u201cThe pullback in Canadian travel is having an outsized impact on Maui, which in 2023 hosted more Canadian visitor days than any other county,\u201d according to UHERO. \u201cThe decline in Japa\u00adnese and other international arrivals will have the biggest effect on Honolulu and Hawaii counties.\u201c<\/p>\n
Heading into 2026, according to UHERO, \u201cinflation will have lifted local prices by an average of 1.5% more than it would have been, permanently raising typical household costs by roughly $1,400 annually. State income tax relief worth about $2,000 for the median-income household will help to support purchasing power, but federal SNAP and Medicaid cuts will remove benefits for tens of thousands, hitting the lowest-\u00adincome families hardest.\u201d<\/p>\n
Construction driven by ongoing Skyline rail work, federal contracts at Joint Base Pearl Harbor-Hickam, a new Aloha Stadium district and the rebuilding of Lahaina represents the lone bright spot for Hawaii\u2019s economy.<\/p>\n
But the construction industry also faces potential uncertainty over Trump\u2019s tariffs, according to UHERO.<\/p>\n
\u201cThe biggest risk to the (construction) sector is the impact of tariffs on the cost of materials,\u201d according to UHERO.<\/p>\n","protected":false},"excerpt":{"rendered":"Hawaii\u2019s red-hot construction industry represents the only bright spot in an otherwise somber economic outlook heading toward the…\n","protected":false},"author":2,"featured_media":162916,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[84,1294,53792,56,54,55],"class_list":{"0":"post-162915","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-economy","10":"tag-editors","11":"tag-uk","12":"tag-united-kingdom","13":"tag-unitedkingdom"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/162915","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=162915"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/162915\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/162916"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=162915"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=162915"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=162915"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}