UH economists downgrade an already bleak forecast

Hawaii’s economic crisis and a drop in Japanese visitors due to the swine flu outbreak led University of Hawaii economists in June to further downgrade their already bleak outlook for Hawaii’s economy over the next two years.

In May, University of Hawaii Economic Research Organization economists Carl Bonham, Byron Gangnes and Kimberly Burnett were anticipating a report with few downward revisions. Now, however, they predict the state will see larger job losses this year and next, while the number of Japanese visitors will fall further than previously forecast, according to the quarterly state forecast released in mid-June by UHERO.

Payroll jobs will drop by almost 3 percent this year and another 0.6 percent in 2010, the report said. The group now forecasts Hawaii’s unemployment rate, which was 6.9 percent in April, to hit 7.4 percent for 2009 and rise to 8.1 percent next year.