Is Hawaii headed for a recession?
It is coming, according to the state's economist. It is a just a question of when. Even though there are a number of positives over our economy right now, things are expected to get worse next year.
Kalihi pet center has a lot of squawk about when it comes to its dillingham store.
"We like to keep this place full. We don't like it empty so people have a variety to pick from," said Kalihi Pet Center employee Chloe Barro.
Business has been good as customers come in to buy items for their pets, or pick up new companions.
"People want something to keep them company at home," added Barro.
Consumer spending in Hawaii is up, which has led to an increase in revenue for businesses and the state this year.
"For the first 8 months of 2019, tax revenue increased 6.3%, GE tax also increase 6.3%, and visitor spending has been increasing three months in a row," said Eugene Tian, an economist for the Dept. of Business, Economic Development and Tourism.
Not everything looks good for Hawaii's economy.
Data shows the state is losing some of its labor force and unemployment rates are on the rise.
After a record year of construction in 2018, there has been a nearly 10% drop in building permits this year. Which means the industry will slow down in 2020.
Hawaii's economy is only expected to see a growth rate of 1% over the next few years. That is expected to increase unemployment rates, even thought there may be fewer job seekers.
"People are either leaving the state, or they may have given up looking for jobs. So we see the decrease in the labor force," stated Tian.
Fewer worker could mean fewer customers at Ubae where it has been a challenge to get customers to try its sweet yam cookies, cheesecake and ice cream.
"A lot of people don't know what it is, so you have to explain what it is," stated Ubae employee Chelsea Subia.
There is concern, as the economy contracts, people would spend less on sweets like Ubae.
"It is more like a treat, so its not really a necessity, but a lot of people like it," added Subia.
Economic indicators point to a slowing economy not just in Hawaii, but around the United States and in many other countries. That would put an end to the boom over the past decade.
"We are not going into a recession yet, but it is slowing down. As consumers, we should be getting ready," said Tian.
Not all businesses may be hurt by the slowdown. Aloha EBikes has been riding consumer's green wave of spending.
"This year we are expecting growth, of about a 5-10% increase in sales," said owner Henry Jiao.
Jiao found in the past, when spending shrank, more people looked to cut transportation costs. Which means some residents could get rid of their cars and get on an electric bike.
"We have more customers jump to riding bikes, particularly ebikes. For us, this business, we don't expect a slow down," said Jiao.
Tian added the trade war between the US and China, and other countries, doesn't help. Especially in Hawaii, where residents already pay a higher price because everything has to be imported.