The government has adjusted its forecast to include fewer job losses and more visitors
POSTED: 1:30 a.m. HST, Aug 20, 2010
Hawaii's economy is picking up speed at a faster pace.
The outlook for visitor arrivals, visitor spending, personal income and job growth has significantly improved in the last three months, according to an updated forecast released yesterday by the state Department of Business, Economic Development and Tourism.
The upbeat forecast comes as a broad swath of businesses -- including retailers, auto dealers and airlines -- have shifted into expansion mode in anticipation of renewed economic growth in Hawaii.
Safeway, Longs Drugs, T.J. Maxx, Target and PETCO have recently confirmed plans to add stores or enter the Hawaii market in the coming years. Bed Bath & Beyond opened its first Hawaii store earlier this month at Pearlridge.
Auto dealerships, which were among the recession's casualties, are on track for an increase in sales this year for the first time since 2005.
Airlines are adding enough new seats to Hawaii from the mainland this year to make up for about half of the 1 million seats that were lost in 2008 and 2009.
Mark Fergusson, CEO of the Down to Earth All Vegetarian Organic and Natural grocery chain, plans to open a store in Kapolei next year. "At the time we signed the lease a few months ago to go in at Kapolei Commons, we were seeing how things on Oahu were picking up," Fergusson said.
The improving economic picture marks a turnaround from the depths of the recession in 2008 and 2009 when dozens of restaurants, retailers and other business shut down and laid off tens of thousands of workers.
Although Hawaii's labor market is still expected to contract this year, the number of job losses will be fewer than what was predicted in May, the DBEDT said in its quarterly economic forecast.
"We are pleased by the strong performance of our tourism industry," Ted Liu, DBEDT director, said in a prepared statement.
"We have seen job gains in the tourism-related fields during the first half of the year, and this will have a ripple effect that will help minimize job losses in other sectors during the second half of the year," he said.
Visitor arrivals are expected to rise 4.6 percent in 2010 from 2009, and visitor spending is forecast to increase by 8.2 percent. DBEDT had forecast in May a 2.6 percent rise in arrivals and a 4.9 percent increase in spending.
Hawaii's inflation-adjusted gross domestic product, the broadest measure of economic activity in the state, is forecast to rise 1.2 percent in 2010. That was revised up from a 1.1 percent increase in the May forecast.
Oahu is faring better than the neighbor islands, with a lower unemployment rate, higher hotel room occupancy and stronger visitor spending.
Young Bros. Ltd., the state's largest interisland barge company, said interisland shipments are in their third year of decline.
"We're still down 4.5 percent to 5 percent from a year ago," said Glenn Hong, Young Bros. president. "Even though there's been some improvement in hotel occupancy, they're still not hiring. The economy is coming out of a deep trough," he said.
DBEDT forecast the number of wage and salary jobs statewide to decline to 594,100 this year, a 0.6 percent drop from 2009.
The agency had forecast in May a 0.9 percent drop in jobs.
The forecast for inflation-adjusted personal income growth in 2010 was revised to 0.3 percent from 0.2 percent in the May report.
|Wage and salary jobs||-0.6||1.0||1.1|
|Gross domestic product*||1.2||1.6||1.9|
Source: State Department of Business, Economic Development and Tourism