First quarter economic forecast predicts challenging tourism year for Hawai'i.
The latest economic forecast for the state is out from the University of Hawaiʻi Economic Research Organization.
HONOLULU (KITV4) -- If it feels like things have gotten more expensive and your dollar doesn't go as far, you are right. The latest economic forecast for Hawaii is out from the University of Hawaii Economic Research Organization (UHERO).
UHERO's first quarter forecast verifies that inflation in the islands has been less severe than on the US mainland.
The price of living in paradise keeps going up. At least, that's what it feels like for some residents. Salvatore Satullo is a vegetable farmer on Waimea, Hawaii Island.
"I'm a small farmer. Seeds, boxes, tools, shipping - we're still paying surcharges. Everything is more expensive, by like 30%, 40%, 50%," Satullo said.
"The price of eggs, milk, groceries are going up. Even the restaurants are raising their fees. It does eat into your paycheck," noted Pearl City resident, Robert Choate.
But UHERO economists say prices have stopped rising, for now.
"Food at home has completely flattened out over the last six months. That's good news. If you're getting a wage increase, those wages are making progress against rising prices," said UHERO Director Carl Bonham.
That's also affecting housing, continues Bonham.
"Home prices are starting to come down and rents," Bonham observed.
UHERO says inflation has taken a big bite out of purchasing power. It estimates real personal income declined more than 6% last year.
It also predicts a challenging year for our tourism economy. Domestic arrivals will drop a bit, but that'll be offset by the international travel economy continuing to recover.
Hawaii Lodging and Tourism Association president Mufi Hannemann agrees.
"It underscores what we've been seeing and saying for some time. Even though we see numbers coming back and looks like tourism has a full recovery, that's a short-sighted view of the industry," Hanneman told KITV4.
Carolyn Goonan and her husband are visiting from Melbourne, Australia. They were here also in 2019 and say prices are higher than in their previous visit for everything, including hotel rooms.
"A couple hundred more dollars per night per room, compared with a couple years ago," Goonan said.
Overall, the economists are cautiously optimistic.
"The economy continues to be more resilient and there's a stronger labor market, with more modest consumer spending than we had anticipated. That translates into stronger US visitor demand than we were expecting at this time," Bonham said.
This would let us work on longer-term challenges like our aging population, climate change, and housing. Satullo emphasized what's becoming a common refrain in this state: "We have got to build more housing."
Diane is KITV4’s weekend evening anchor and weekday reporter. She hosts the Aging Well series on Tuesday evenings at 5, 6, and 10 p.m. She is a mother, a cat owner, and a yogi.
