The recent federal government shutdown didn’t shut down Hawaii’s economy, and the future looks particularly bright for the neighbor islands, where job growth is expected to outpace that of Oahu over the rest of the decade.

That’s according to reports released this week by the University of Hawaii Economic Research Organization and the state Department of Labor and Industrial Relations.

The Labor Department report found that Kauai County, with a predicted expansion rate of 15.4 percent between 2010 and 2020, will increase the fastest, followed by Maui County at 15.1 percent, Hawaii County with growth of 14.8 percent, and Oahu with a modest expansion rate of 10.5 percent.

However, with an expected gain of 49,970 jobs over the decade, Honolulu will account for nearly two-thirds of the total statewide increase in jobs.

“We’re very pleased with the positive economic forecasts for Hawaii County by UHERO and the Labor Department. Projected job growth of 14.8 percent with positive job growth in all sectors across the economy including construction and tourism means Hawaii Island is beginning to see the economic recovery we knew would come,” Hawaii County Mayor Billy Kenoi said Thursday.

The government shutdown, the battle over the debt ceiling and possible impasses in Washington, D.C., early next year have been worrisome to economic forecasters, and they’ve had some impact on Hawaii. But it could have been worse, UHERO researcher Peter Fuleky said Thursday.

“If we look back a month ago, everybody was really worried about what would happen. The more uncertainty that is generated, the less consumers are willing to spend on luxury items such as travel, and we’re really affected by that,” Fuleky said. “But despite all these worries, we keep expanding. It could be better, but the economy is still going forward.”

Positive industry growth is projected for all of the counties from 2010 to 2020.

The statewide unemployment rate, at 6.5 percent in 2011 and 5.8 percent in 2012, is expected to continue dropping, to 4.6 percent for 2013, 4.0 percent in 2014, 3.7 percent in 2015 and 3.5 percent in 2016, according to UHERO. Real personal income, meanwhile, will increase by 2 percent, 1.3 percent, 1.6 percent 3.5 percent, 2.9 percent and 2.3 percent over those same years.

Tourism, the primary economic driver for the state, is expected to increase moderately this year, with a 4.3 percent increase in visitors statewide, compared to a 9.7 percent increase between 2011 and 2012, according to the UHERO report. That’s still better than the 3.7 percent increase in 2011, however.

The Labor Department projects Kauai County will lead the leisure and hospitality sector, with a 1.7 percent annual job growth over the decade, compared to 1.6 percent in Maui County, 1.3 percent in Hawaii County and 1.2 percent on Oahu.

The construction industry will provide the largest percentage gain in all counties, gaining near 3 percent on an annual basis, with the exception of Kauai County, which will experience the biggest boost in the manufacturing industry at 3.7 percent annually.

Hawaii County is expected to add 930 construction jobs over the decade, compared to 810 in Maui County, 350 in Kauai County and 6,610 on Oahu.

Kenoi points to a fairly robust real estate market in Hawaii County as another indicator that the recovery is underway.

“Hawaii County real estate sales are experiencing the strongest recovery in the state, with median sale prices up 18 percent,” Kenoi said. “All of these numbers and projections show a growing confidence in Hawaii Island’s economic recovery.”

More robust than the 15 percent growth statewide in tourism over the decade, is a projected 21 percent increase in jobs in education and health services, according to the Labor Department. Government (excluding education and state hospitals), manufacturing, information and natural resources and mining are among the industries forecast to see the most anemic growth statewide.

By Nancy Cook Lauer – West Hawaii Today –