State economists have ratcheted up their expectations for Hawaii’s economy on the heels of a stronger-than-expected tourism market, increased air seats and a record-low unemployment rate.

Visitor arrivals are now forecast to rise 4.6 percent this year to 9.3 million and then grow another 2.3 percent next year to more than 9.5 million, according to the latest quarterly report by the Department of Business, Economic Development and Tourism. Those numbers were revised upward from increases of 3.2 percent and 1.4 percent, respectively, in DBEDT’s August economic report. DBEDT has increased its 2017 forecasts for visitor arrivals and spending for three straight quarters.

“Scheduled air seats, the supply side of the tourism industry, will increase by 8.5 percent during the first three quarters of 2018,” DBEDT Director Luis Salaveria said in the report, which was issued last week. “Based on the current trend, there is the potential that we may be welcoming more than 9.5 million visitors in 2018.”

An increase in nonstop flights to the neighbor islands by mainland carriers as well as Hawaiian Airlines is expected to fill some of the void that was left by the Nov. 10 shutdown by interisland carrier Island Air.

“It is a positive sign that direct flights to the neighbor islands during the next three quarters are expected to increase by more than 20 percent,” chief state economist Eugene Tian said. “That will help to ease the interisland flight shortage due to Island Air ceasing operations.”

DBEDT now expects visitor spending to rise 6.7 percent this year to just under $17 billion and increase 3.9 percent in 2018 to $17.6 billion. Those numbers are revised upward from 6.5 percent and 2.2 percent, respectively, in the agency’s last report.

Through October of this year, visitor arrivals are up 4.7 percent to 7.8 million while spending is ahead 6.8 percent to $13.9 billion, according to preliminary data released Thursday by the Hawaii Tourism Authority. Both categories are on track to set records for the sixth straight year.

Hawaii’s seasonally adjusted unemployment rate has continued to drop and in October hit 2.2 percent, the lowest in the nation. Over the first 10 months of this year, the state gained 7,800 additional payroll jobs from the year-earlier period.

DBEDT said it now expects Hawaii’s inflation- adjusted gross domestic product — the broadest measure of economic output — to rise 1.7 percent this year. That’s a turnaround from its August report when it lowered its forecast to 1.4 percent after previously projecting a 1.9 percent increase in its May report.

“The overall economic condition is good,” Tian said. “We have one of the best labor markets in the nation, tourism is performing well, our real estate market continues to be strong, and more building permits are being issued. The challenge is that not all of the industries are performing well and some industries continue to lose jobs.”

DBEDT kept its projection for growth in nonfarm payroll jobs the same at 1 percent and 0.9 percent for this year and next year. The agency also maintained its forecast for personal income growth at 1.7 percent and 1.5 percent, respectively, for this year and 2018. The projected inflation rate was kept the same at 2.5 percent and 2.3 percent, respectively.

The agency lowered its unemployment rate forecast to 2.6 percent and 2.9 percent for this year and 2018 compared with 2.9 percent and 3.1 percent, respectively, in its last report.