Hawaii ranks No. 10 in economic growth
The isles' gross state product rose 4.8 percent in 2005 from 2004
Hawaii's gross state product expanded 4.8 percent in 2005, making it into the top 10 states in terms of economic growth last year, according to a U.S. Commerce Department report released yesterday.
The Aloha State ranked 10th, behind Wyoming and before New Mexico, in growth of gross state product.
The state's economy grew faster last year than in most other states, a report says.
Size of Hawaii's gross state product: $53.7 billion in 2005
Growth: 4.8 percent
Hawaii's ranking: No. 10 among the states for growth in 2005
Louisiana, which suffered devastating effects from hurricanes Katrina and Rita, trailed the nation, shrinking by 1.6 percent, while Arizona led with an 8.7 percent growth rate, according to the department's Bureau of Economic Analysis.
Gross state product, the total value of goods and services produced in the state, is considered by many to be the widest measure of economic activity. For Hawaii, that figure was $53.7 billion in 2005, out of a U.S. total of $12.4 trillion.
U.S. economic growth in 2005 was widespread with 49 out of the 50 states and the District of Columbia reporting increased GSP. However, growth in real U.S. GSP slowed from 4.2 percent in 2004 to 3.5 percent in 2005.
Hawaii's GSP growth decreased a scant 0.2 percent from 2004 to 2005. The slight decline, which was in keeping with the rest of the nation, may not be noteworthy since 2004's banner results mostly are due to recovery from the impact that SARS and the Iraq War had on Hawaii's tourist-driven economy in 2003, said state economist Pearl Imada Iboshi.
"No. 10 is a terrific ranking," Imada Iboshi said. "It exemplifies everything that we've been feeling and validates what we've been seeing in terms of personal income and job numbers."
Strong performance from Hawaii's visitor industry, which makes up about 20 percent of the economic measure, as well as the housing market, the construction industry, and tech and federal government sectors, resulted in one of Hawaii's better GSP measures in 2005, she said.
"If you look at the historical data, it really is a high rate of growth for Hawaii," Imada Iboshi said.
As home values in Hawaii have risen, driving up the imputed rental value of homes, the amount that homeowners would have to pay to rent their own property, so has GSP, she said.
"Growth in the imputed rental value of the homes in Hawaii has played the greatest role in the strength of our GSP," Imada Iboshi said.
The role Hawaii's real estate market has played in economic growth can best be gauged by looking at previous results.
In 2000, a year in which Hawaii broke records in tourist arrivals, the state posted a 1.9 percent GSP growth rate and earned a ranking of 42nd in the nation.