For Immediate Release: May 12, 2008
DBEDT Release News 08-10

HONOLULU—In its latest quarterly economic report, the Department of Business, Economic Development & Tourism (DBEDT) expects moderate but slower growth in Hawai'i's economy for this year and the next.

"We believe that our economy will adjust to recent economic events and that our fundamental economic foundation remains strong," said DBEDT Director Theodore E. Liu.

Personal income, total wage and salary jobs, and state gross domestic product (GDP) are all forecast to show moderate growth over the next several years; however, the projected rates of growth have decreased from the previous forecast. The shut down of Aloha Airlines and ATA coupled with the departure of two domestic cruise ships from Hawai'i's market will likely cause some decline in total visitor arrivals for 2008.

Total visitor arrivals are now expected to decline 3.0 percent in 2008, compared to 1.4 percent decrease in the previous forecast. DBEDT projects no growth in total visitor arrivals in 2009, followed by 1.4 percent and 1.7 percent growth in 2010 and 2011, respectively.

Real personal income (corrected for inflation) is now estimated to increase 0.8 percent in 2008, down 0.8 of a percentage point from the previous forecast. In 2009, real personal income is projected to grow 1.1 percent, also down 0.8 of a percentage point from the previous forecast. These downward revisions in real income growth are mainly due to revised lower forecasts of nominal personal income.

The Honolulu Consumer Price Index (CPI), a proxy for inflation, is expected to rise 4.2 percent in 2008, 0.2 of a percentage point higher than in the previous forecast. The CPI growth for 2009 is projected to be 3.3 percent, 0.1 of a percentage point lower than in the previous forecast.

In response to considerable moderation in both job and employment growth in the latest quarter, the 2008 forecast of wage and salary job growth has been lowered to 0.4 percent from1.4 percent in the previous forecast. The job growth forecast for 2009 is also decreased to 0.8 percent from 1.3 percent in the previous forecast.

Real GDP is projected to grow 2.3 percent in 2008 and 2.2 percent in 2009, respectively, down 0.2 and 0.3 of a percentage point, respectively, from the previous forecast.

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

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