For Immediate Release: August 16, 2007
DBEDT Release News 07-19

HONOLULU--In its latest quarterly economic forecast, the Department of Business, Economic Development & Tourism (DBEDT) continues to predict moderate growth for Hawai‘i's economy this year and into 2008.

Personal income, total wage and salary jobs, and state gross domestic product (GDP) are all forecast to increase, although below the unusually high growth rates experienced during the previous few years. Continued sluggishness this year in international tourism will cause a slight decline in total visitor arrivals for 2007, despite continued growth in the domestic visitor market. Visitor arrival growth is expected to return in 2008.

"We continue to see sustained growth in jobs and income and some moderation in the rate of inflation, despite the softening in international visitor arrivals," said DBEDT Director Theodore E. Liu. "More moderate growth may help ease pressures on our exceptionally tight labor market."

Based on a 1.6 percent decline in visitor arrivals for the first half of the year, DBEDT now expects total visitor arrivals in 2007 to show a slight, 0.3 percent decline. The expectation for 2008 visitor growth has been lowered a half percentage point to 1.5 percent. As late as the May forecast, visitor arrivals were expected to show a 1 percent increase for 2007.

The forecast for real personal income growth remains unchanged at 1.8 percent in 2007 and 1.9 percent in 2008.

The forecast for Honolulu's Consumer Price Index (CPI) is also unchanged at 4.5 percent for 2007 and 3.8 percent for 2008. The CPI moderated from a 5.9 percent increase for all of 2006, to a 5.0 percent increase in the first half of 2007 and is expected to moderate further in the second half of the year.

The 2007 forecast of wage and salary job growth in 2007 has been raised to 2.0 percent, up somewhat from the 1.8 percent forecast in May. This is based on a better-than-expected, 2.1 percent job growth in the first half of the year. Forecasted job growth for 2008 remains unchanged at 1.5 percent. Job growth has been particularly strong in professional and business services, construction, the health sector and government activities.

Hawai‘i's real GDP growth is now projected to be 2.9 percent for both 2007 and 2008, also up slightly from the May forecast.

The DBEDT Quarterly Statistical and Economic Report contains more than 100 tables of the most recent quarterly data on Hawai‘i's economy as well as narrative explanations of the trends in these data. The full report is available at http://www.hawaii.gov/dbedt/info/economic/data_reports/qser.

For more information, contact:
Dave Young, DBEDT Communications
Phone: (808) 587-1212
Email: dyoung@dbedt.hawaii.gov