State officials Tuesday lowered their forecast for economic growth in Hawaii this year and next due to smaller-than-expected gains in visitor arrivals and spending.

Despite the downward revisions, the economic expansion remains firmly on track, with growth rates forecast to remain above the long-term average, according to the quarterly report from the Department of Business, Economic Development and Tourism.

A budding recovery in the construction sector will help take up some of the slack in tourism, boosting both the job market and tax revenue, DBEDT reported.

Inflation-adjusted gross domestic product, the broadest measure of the state’s economic activity, is forecast to grow by 2.6 percent in 2014 and 2.2 percent in 2015. Those projections are down from 2.8 percent and 2.5 percent that DBEDT published in its previous forecast three months ago. Nonetheless, the 2014 forecast is still above 2013’s growth rate of 2.4 percent.

Although visitor arrivals ended last year on a down note, they were still strong enough to hit a record 8.24 million for the year. DBEDT is forecasting a 1.7 percent increase in visitor arrivals this year, down from its previous estimate of a 2.7 percent gain published in December. DBEDT also lowered its forecast for visitor spending in 2014.

"We expect the construction industry to lead our economic growth in the next few years," said DBEDT Director Richard Lim. "Externally, economic conditions are improving in the U.S. economy. In Hawaii, tourism’s growth, despite record visitor arrivals last year, is stabilizing, so we are depending on construction to be a strong economic driver," Lim said.

Hawaii’s economy is expected to add another 8,200 nonagricultural payroll jobs in this year, surpassing last year’s gain of 8,000 jobs.

The construction industry, which generated 2,500 new jobs last year, is predicted to continue hiring in 2014 and 2015. A separate report released by DBEDT last week on the impact of construction in Hawaii said the industry is on track to add 5,000 jobs over the next two years.

The tax base for the construction industry is forecast to grow by 12.4 percent in 2014 and 8.3 percent in 2015.

Inflation, which erodes consumers’ purchasing power, is forecast to gradually increase as the economic expansion picks up speed. DBEDT expects the Hono­lulu Consumer Price Index to increase by 2.1 percent in 2014, up from 1.8 percent in 2013. The forecast calls for the inflation rate to increase to 2.5 percent in 2015 and 3 percent in 2016.

The average Hono­lulu inflation rate between 1990 and 2013 was 2.7 percent.