DBEDT expects Hawaii economy to stall in 2009
Pacific Business News (Honolulu)
Hawaii’s economy is expected to come to a standstill in 2009, according to a report released Tuesday from the Hawaii Department of Business, Economic Development and Tourism.
The updated forecast projects that financial conditions in the United States and international markets to put a damper on growth. Real gross domestic product is forecast to show only slight growth in 2008 and no growth in 2009. Personal income is expected to decline in both 2008 and 2009, wage and salary jobs will likely show no growth in 2008 and slightly decline in 2009, according to the quarterly report.
“Hawaii’s economy has so far avoided the degree of economic slowdown experienced nationally,” said Ted Liu, DBEDT director, in a statement. “However, the impact of the financial uncertainties can be seen in the slowing of our construction and tourism sectors and will impact the state’s economy through next year.”
Liu mentioned a few “bright spots” in the report, including federal and military spending as well as the acceleration of capital improvement construction projects by the state.
The report forecasts a 10.1 percent decline in visitor arrivals in 2008 and a 1.9 percent decrease in 2009. DBEDT said it expects a total of 6.8 million visitors in 2008 with expenditures of $11.5 billion. Visitor counts are expected to decrease in 2009 to 6.7 million, although spending is expected to increase to $11.6 billion.
Highlights of the report include:
- The forecasts for real personal income growth to decline 0.2 percent for 2008 and 0.4 percent for 2009.
- Inflation is expected to rise to 4.2 percent this year and 2.6 percent next year.
- Hawaii’s real GDP growth now is projected to grow 0.3 percent in 2008 and is not expected to grow at all in 2009, down 1.6 and 2 percentage points, respectively, from the previous forecast.
- Wage and salary growth was lowered to 0 percent from 0.2 percent in the previous forecast for 2008. The job growth forecast for 2009 decreased to negative 0.2 percent from positive 0.5 percent in the previous forecast.
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