Hawaii’s economy will grow slightly faster this year than previously expected, but job recovery won’t be realized until 2014, according to a state economist.
Boosted by a strong rebound in visitor spending and construction jobs, the state revised yesterday growth projections for overall gross domestic product — the broadest measure of economic activity in Hawaii — to 2 percent this year, according to a quarterly report released yesterday by the Department of Business, Economic Development and Tourism. That’s up from the 1.8 percent increase predicted in November.
Percentage changes forecast through 2013:
* Adjusted for inflation
Source: State Department of Business, Economic Development & Tourism
However, it will take three years for jobs to return to the 2007 peak level of about 631,000, Eugene Tian, acting state economist, said yesterday.
"Employment is still lagging the economic growth," he said. "The job recovery will be coming later than the other indicators in the economy."
The biggest upward revision among the various economic indicators was visitor spending, which DBEDT now predicts will grow 9.2 percent to $12.66 billion in 2011, as a result of a boost in tourists from higher-spending markets such as China and South Korea, as well as higher hotel room rates. DBEDT previously forecast an 8.4 percent increase.
Tourism will exceed the 2006 peak level of 7.6 million visitors by 2013, moving the economy from recovery to expansion, according to the report.
The job market also is improving, with the growth in payroll jobs revised upward to 1.3 percent this year from the 1.1 percent rise previously forecast, primarily due to new building projects.
The construction industry reversed 29 months of declines when it began to add jobs in October. The value of commercial and industrial building permits increased 32.5 percent last year, DBEDT Director Richard Lim said yesterday in a statement.
"We are encouraged by the continued improvement in our economy, especially with respect to our construction industry," he said.