Hawaii businesses and nonprofits enjoyed a period of relative calm in 2024, with many reporting revenue gains. This stability, however, is now overshadowed by growing uncertainty, as external factors threaten to disrupt the state's economic landscape. The incoming Trump administration's policies have introduced uncertainty into the economic forecast. Spectrum Local News highlights how these changes are causing concern for the future of the U.S. economy, which would, in turn, affect Hawaii.
Looking ahead, the University of Hawaiʻi Economic Research Organization (UHERO) paints a more cautious picture. UHERO's forecast suggests that Hawaii may face a mild recession. Manoa Now notes that this prediction is tied to falling tourism numbers and potential disruptions from tariffs and trade policies. UHERO also warns of other potential risks, including the possibility of a downturn due to deteriorating labor market conditions.
The specter of federal policy changes, including potential cuts, further complicates the outlook. UHERO suggests that federal layoffs could result in significant job losses, potentially offsetting gains in other sectors. These shifts in federal policy could place the Hawaii economy at risk of recession. Even though tax cuts may provide a short-term stimulus, the full effect of broader policy changes may create a significant drag on growth for local businesses.
While the past year offered stability, Hawaii's entrepreneurs, investors, and business professionals must prepare for a more challenging environment. Understanding and proactively addressing the potential impacts of tariffs, evolving federal policies, and broader economic trends will be crucial for navigating the uncertainties that lie ahead.
