Moderate but slower growth in Hawai‘i’s economy is expected for this year and the next, according to the state Department of Business, Economic Development and Tourism’s latest quarterly economic report.
Personal income, total wage and salary jobs, and state gross domestic product are all forecast to show some growth over the next several years; however, the projected rates of growth have decreased from the previous forecast.
“We are experiencing an economic adjustment here in Hawai’i,” Director Theodore E. Liu said. “However, we are not predicting a dramatic downturn. In fact, we are still expecting to see modest economic growth in the state.”
The shutdown of Aloha Airlines and ATA coupled with the departure of two domestic cruise ships from Hawai‘i’s market is expected to cause declines in total visitor arrivals for 2008.
Arrivals are now expected to decline 6.7 percent in 2008, compared to a 3 percent decrease in the previous forecast.
DBEDT projects a slight decrease in total visitor arrivals in 2009, followed by 1.4 percent and 1.7 percent growth in 2010 and 2011, respectively.
Real personal income (corrected for inflation) is now estimated to increase 0.4 percent in 2008, down 0.4 percentage point from the previous forecast.
In 2009, real personal income is projected to grow 0.8 percent, down 0.3 percentage point from the previous forecast. These downward revisions are mainly due to revised higher forecasts of inflation.
The Honolulu Consumer Price Index, a proxy for inflation, is expected to rise 4.5 percent in 2008, 0.3 percentage point higher than in the previous forecast. The CPI growth for 2009 is projected to be 3.5 percent, 0.2 percentage point higher than in the previous forecast.
In response to slower job growth in the latest quarter and lower forecasts of visitor arrivals, the 2008 forecast of wage and salary job growth has been lowered to 0.2 percent from 0.4 percent in the previous forecast. Projected job growth for 2009 has also decreased to 0.5 percent from 0.8 percent in the previous forecast.
Real GDP is projected to grow 1.9 percent in 2008 and 2.0 percent in 2009, respectively, down 0.4 and 0.2 percentage points, respectively, from the previous forecast.
The DBEDT Quarterly Statistical and Economic Report contains more than 100 tables of the most recent quarterly data on Hawai‘i’s economy as well as narrative explanations of the trends in these data. The full report is available at: www.hawaii.gov/dbedt/info/economic/data_reports/qser