State predicts economic slowdown
The DBEDT forecasts continued growth but at a slower pace
Hawaii residents can expect economic expansion to slow this year, according to the latest state forecast.
The quarterly report released yesterday by the state Department of Business, Economic Development & Tourism forecasts residential construction to slow down, following on the heels of a slower-to-move residential real estate market.
Visitor traffic, which was flat last year, will increase 1.4 percent to about 7.6 million in 2007, the agency estimates. That represents a 1.2 percentage point reduction from the previous quarterly forecast.
Honolulu's Consumer Price Index is forecast to increase 4.0 percent this year -- 0.4 percentage points higher than in the previous forecast. In 2008, Honolulu prices are expected to rise 3.4 percent.
Both figures would be a relief from the 2006 inflation rate, which the federal Bureau of Labor Statistics reported at 5.9 percent -- the biggest increase recorded in any U.S. city.
Total job growth, meanwhile, is expected to be 1.8 percent in 2007 -- a slight increase from the previous forecast -- and 1.5 percent in 2008.
DBEDT estimates growth in real personal income -- income growth adjusted for inflation -- to have been 0.5 percent in 2006. That is 1.6 percentage points lower than in the previous forecast due to the much higher actual rate of inflation.
Real personal income is expected to increase 1.9 percent in 2007 and 2.1 percent in 2008.
Hawaii real Gross Domestic Product is expected to have increased 2.7 percent in 2006 -- a 0.6 percentage point reduction from the previous forecast -- and 2.6 percent in 2007.
For 2008, the outlook is for growth of 2.5 percent.
DBEDT Director Ted Liu said in a statement yesterday that the ongoing federal military housing initiative, along with continued job growth, improvement in visitor arrivals and strong growth in non-residential construction should maintain the overall economy's growth in the near term.