The ongoing slow growth of Hawaii’s economy is expected to pick up slightly this year after easing last year, according to a new state forecast.
State economic growth is projected to be 1.2 percent this year, up from
an estimated 1 percent growth last year that
represented an unexpected dip from the
1.2 percent growth in 2017.
The state Department of Business, Economic Development and Tourism on Wednesday released the forecast that anticipates a rebounding rate of growth in the local economy, which has been expanding since 2010.
“We expect our tourism, construction, and health care industries continuing to perform well this year,” Mike McCartney, DBEDT’s
director, said in a statement. “These industries have been the driving force for Hawaii’s economy in the current business cycle.”
This year’s expected growth rate for the local economy is unchanged from DBEDT’s previous assessment issued in
November, but the agency’s new report did adjust its 2019 forecast for several main components of total economic output also known as gross domestic product, or GDP.
These changes include a bigger gain in visitor
arrivals, a smaller gain
in visitor spending, higher unemployment, lower personal income growth and reduced inflation.
DBEDT expects the number of tourists
coming to Hawaii will increase 2 percent this year instead of its previously expected 1.8 percent gain. The higher rate, DBEDT said, is due to All Nippon Airways’ plan to fly bigger planes to Hawaii this year and the scheduled start
of Southwest Airlines’
service from the mainland on March 17.
Eugene Tian, the state’s chief economist, said the gain in visitors this year could top 2 percent depending on the timing of additional routes expected from Southwest.
“We know there will
be an increase (from Southwest), but we don’t know how much,” he said. “I think our 2 percent might be still conservative.”
The difference between 1.8 percent and 2 percent growth in visitors amounts to roughly
20,000 tourists. In either case, the state’s annual visitor count would top
10 million for the first time.
As for visitor spending, DBEDT dialed back its growth projection this year to
3.3 percent from 4.2 percent that it previously forecast. Even with the lower level of expected growth, spending would reach $18.5 billion this year, up from about $17.9 billion last year.
Hawaii’s unemployment rate is forecast at 2.7 percent, up from 2.4 percent last year. In DBEDT’s November report, the rate this year was forecast to be 2.5 percent.
Personal income, after accounting for inflation, is forecast to rise by 1.5 percent this year instead of 1.7 percent in the earlier report. Personal income last year grew 1.3 percent.
Inflation, or the cost
of goods and services generally, is forecast to rise by
1.9 percent. That would match last year’s inflation rate but is less than the
2.3 percent that DBEDT had previously expected this year.