Hawaii’s economy is still growing but at a slower pace.
The state revised its growth forecast lower Wednesday and projected that Hawaii’s inflation-adjusted gross domestic product, the broadest measure of economic output, will rise just 2.5 percent this year. That is down from the 3.1 percent it projected just three months ago.
Visitor spending also was ratcheted lower by the state Department of Business, Economic Development & Tourism because of the strong U.S. dollar and the shifting between international and domestic visitors. Spending is now forecast to grow just 2 percent to $15.15 billion. While it still would represent a fourth straight record year, it’s lower than the state’s earlier forecast of 3.4 percent and $15.36 billion.
All signs weren’t pointing down, however,
The state raised its visitor arrivals forecast and now projects a 2.5 percent increase to a record 8.49 million. That’s up from last quarter’s projected 2.1 percent increase to 8.45 million.
“The downward adjustment in Hawaii’s economic growth rate is mainly due to the slower than expected growth of the U.S. economy during the first quarter and the decline in Japanese visitor spending as a result of a strong U.S. currency,” DBEDT Director Luis P. Salaveria said. “Our economic fundamentals are still healthy. Our labor market is among the best in the U.S., and our construction industry is picking up, especially in residential construction.”
Japanese visitor arrivals, which have been slumping because of the weaker yen, were down 4.7 percent to 358,880 during the first quarter while their spending was down 16.4 percent to $509.1 million. On Wednesday, the U.S. dollar was fetching 119.13 yen.