Economists: Hawaii GDP to grow 2.9%
HONOLULU — Hawaii’s economy should grow slightly faster this year as the recovery continues and expands beyond the tourism industry, University of Hawaii economists said Friday.
Gross domestic product is likely to grow 2.9 percent this year, up from 2.6 percent last year, the university’s Economic Research Organization said in a report.
Tourism industry growth has slowed as a weaker yen depresses spending by Japanese travelers. Rising prices for Hawaii hotel rooms and automatic federal government budget cuts are contributing to a decline in mainland visitors, said economist Carl Bonham, one of the report’s authors.
The report forecasts visitor arrivals will increase 0.7 percent this year, compared with 2.5 percent last year and nearly 10 percent in 2012.
The construction industry, in contrast, is picking up as new residential condominiums and retail stores are built and Waikiki hotel rooms are renovated. Construction permits for new homes and condominium towers jumped more than 40 percent last year on Oahu, indicating a large volume of projects are in the pipeline.
Government spending will stop weighing down the state’s economy as the effects of the federal budget cuts, also known as sequestration, fade. Federal worker jobs dropped by 3 percent last year, Bonham said, but should be flat this year.
“So instead of getting a roaring economy as you might have if you had construction and the visitor industry and the government all contributing at the same time, things are not quite as synchronized, and so you end up with a little bit more modest growth,” he said. “And hopefully a more sustainable recovery.”
The unemployment rate will likely fall to 4.2 percent from 4.7 percent as hiring becomes more measured than the past few years, the report said. But the economists expect personal income to climb 2.9 percent — compared with 1.9 percent last year.
Tighter labor markets and profitability “should allow workers to begin to share more fully in the benefit of economic growth,” the economist said.
Rules for posting comments
Comments posted below are from readers. In no way do they represent the view of Oahu Publishing Inc. or this newspaper. This is a public forum.
Comments may be monitored for inappropriate content but the newspaper is under no obligation to do so. Comment posters are solely responsible under the Communications Decency Act for comments posted on this Web site. Oahu Publishing Inc. is not liable for messages from third parties.
IP and email addresses of persons who post are not treated as confidential records and will be disclosed in response to valid legal process.
Do not post:
- Potentially libelous statements or damaging innuendo.
- Obscene, explicit, or racist language.
- Copyrighted materials of any sort without the express permission of the copyright holder.
- Personal attacks, insults or threats.
- The use of another person's real name to disguise your identity.
- Comments unrelated to the story.
If you believe that a commenter has not followed these guidelines, please click the FLAG icon below the comment.