Next year may be a year of stabilization in Hawaii's economy, but it will likely be 2011 before sustained economic recovery sets in, economist Leroy Laney said.
Laney, economic adviser to First Hawaiian Bank and professor of economics and finance at Hawaii Pacific University, spoke Thursday at the bank's 40th annual Business Outlook Forum.
Laney said he is predicting a slow recovery in spite of an improving picture at the national level and tenuous recovery in Japan.
"Patience may be the keyword in the short run," he said. "Recovery in the islands will likely be a good bit slower than the descent into recession."
Laney predicts negative job growth of 0.5 percent next year in Hawaii.
"The labor market is usually a lagging indicator, so don't expect that to be where our recovery starts," he said. "Other things like tourism (Hawaii's top industry) have to show signs of sustained improvement before employers start to hire again."
Laney is projecting the state's unemployment rate, which stood at 7.2 percent in September, may edge up in 2010.
"As with jobs, the unemployment rate lags the cycle. Unemployment could remain at the same level as 2009, or it could actually rise some, at least remaining near 7.5 percent," he said.
Next year could see visitor arrivals in Hawaii inch up 1.7 percent, Laney said.
"Even as the national recession ends, long distance, relatively expensive leisure travel will likely remain weak. But arrivals have fallen so far in 2008 and 2009 that at least some growth won't be that difficult to achieve," Laney said.
"As 2010 progresses, without unforeseen shocks the visitor industry could look increasingly better," he said. "But if wealth losses continue to be a drag on U.S. consumption growth, those who do make the trip to Hawaii may continue to be in the mood to spend less than usual when they get here."