The Hansen Ohana attended the meeting where Dr. Bonham spoke. It was very good and the summary below is excellent. We know you would like us to share this info with you.
Pamela Tumpap’s Notes from Who Moved My Recovery? By Dr. Carl Bonham
* Dr. Bonham noted the big question is “what will recovery look like?’
*He said the US reported last summer that the recession is over, but people still wonder what that means.
*He explained that the recovery is likely to e choppy.
*We need to watch consumer confidence and consumption.
*Investment in buildings will likely be subdued.
*We, in our County and State rely on US consumer consumption for travel and tourism and watching these key indicators will give us clues about our recovery.
*Feb. and March, 2010 were good months and we expect things to pick up during the summer.
*Investment in Maui and the State is better than the rest of the country, where lower investments are a drag on the economy.
*A typical recovery shows an increase in consumer consumption, typically followed by a increase in investment in equipment, with increases in structures (buildings) afterwards.
*However, with this recovery, investment in buildings in not expected to come back the same way.
*With excess inventory in homes, no growth is anticipated in housing construction for a while.
*With respect to total US consumption, expect to see growth of about 3% this year.
*While 162,000 jobs were created last month, much of this was temporary employment and government work. It was not really driven by a growing economy, however, it helps as more are working.
*It is estimated that $50 trillion in wealth was destroyed during this recession.
*As a result, we still face a reduction in consumer consumption and people are saving more.
*It will be a long recovery for household and business wealth.
*Government policy did help spur consumption, like Cash for Clunkers and the First Time Home Buyers Program, but this is pretty much done now.
*When looking at Hawaii’s recovery, we need to care about our exports (visitor services), investment, consumption and government.
*The visitor section is currently seeing occupancy rise, but room rates are still down. However, Maui will benefit from increased lift.
*Maui single family residence home sales are up, but what really matters is new construction. Tax credits help drive this, but the question is what happens after July – September. Expect Maui home prices to stay in the $500k-$600k rance for a while.
*Jobs and income affect home sales and until unemployment turns around, do not expect a rebound in home prices.
*For Hawaii, we don’t have consumption data. However looking at the retail tax bases gives us an idea of what consumers are doing. We saw 15% growth in the fourth quarter of last year, so it is picking up a bit.
*Visit www.uhero.hawaii.edu for additional information.