Slower growth forecast for Hawai'i

By Sean Hao
Advertiser Staff Writer

Hawai'i's economy is expected to continue to grow this year, helped by an uptick in visitor arrivals.

However, rising consumer prices and a slower-than-anticipated rebound in the Japanese visitor market means that economic growth is expected to be lower than previously forecast, according to the latest Department of Business, Economic Development and Tourism quarterly report on the economy.

The updated forecast released yesterday predicts real gross state product growth of 2.6 percent this year, versus December's estimate of 2.8 percent growth. At the same time, total wage and salary jobs are forecast to rise 1.5 percent, compared with a prior estimate of 2 percent.

Other economic forecasts that were lowered include expected visitor arrival figures, which now are projected to rise 5.2 percent this year, compared with December's forecast of a 6 percent gain.

Underpinning the overall forecast for continued economic growth is a settlement of the ongoing strike of Ameron Hawaii concrete workers. If settled soon, much of the construction delayed by the strike will be made up in coming months, the report said.

"We continue to be encouraged by the consistent strength of employment and income gains since mid-2003," said DBEDT director Ted Liu. "Once the construction industry is fully back to work, we expect to see that economic momentum continue."

Beyond 2004, DBEDT is predicting economic growth to continue but at a slightly slower rate that eases from 2.4 percent growth in real gross state product next year to a 2.2 percent rate in 2006 and 2007.

Job growth and visitor arrivals also are expected to slow between 2005 and 2007.

Reach Sean Hao at shao@honoluluadvertiser.com or 525-8093.