The state is forecasting steady growth for Hawaii’s economy this year with visitor spending to increase due to the appreciation of the yen and the construction sector to regain momentum in the second half of the year.
In its third-quarter forecast for 2016, the state Department of Business, Economic Development and Tourism said Tuesday it expects Hawaii’s economic growth, as measured by the inflation-adjusted gross domestic product, will grow steadily at 1.9 percent for 2016 and 2017 and at 2 percent for the subsequent two years.
Hawaii’s GDP — the broadest measure of economic output — is higher than the U.S. growth rate of 1.5 percent for 2016, as forecast by the 50 top economic forecast organizations and published in Blue Chip Economic Indicators. For 2017, the U.S. economic growth rate was projected to be 2.2 percent, higher than the Hawaii economic growth rate of 1.9 percent.
DBEDT sees visitor spending rising 3.2 percent to $15.6 billion and arrivals increasing 1.9 percent to 8.8 million. Both categories would mark a fifth straight year of records.
The burgeoning construction sector also is expected to pick up again during the second half of the year.
“Construction jobs reached 40,000 in the second quarter of 2016, the same level as the fourth quarter of 2007, when construction was at its previous peak level,” chief state economist Eugene Tian said. “Due to the labor constraint, building permit applications slowed during the first quarter of 2016, but the value of authorized building permits increased during the second quarter of 2016. We expect the value of building permits will pick up more during the second half of the year.”