State trims economic forecast
Inflation and personal income are expected to remain stable
STORY SUMMARY »
The state trimmed some of its economic forecasts yesterday, while keeping its forecast for inflation steady at 4.5 percent for 2007.
The state Department of Business, Economic Development & Tourism lowered its outlook for wage and salary job growth and for total visitor arrivals, with tourism expected to fall 0.8 percent this year from 2006, compared with a 0.3 percent decline in its previous forecast.
However, strong growth in several job sectors is helping to moderate the effects of slower visitor traffic this year, DBEDT Director Theodore E. Liu said.
FULL STORY »
State economists reined in slightly their forecast for growth in visitor traffic and wages in their latest quarterly report yesterday.
However, the state Department of Business, Economic Development & Tourism kept its estimates for inflation, real personal income and gross domestic product unchanged from its previous report.
"Strong employment growth in professional and business services, construction, and health services is countering slower visitor activity so far in 2007," DBEDT Director Theodore E. Liu said in a statement. "Right now, our analysis is that this should help maintain economic growth into 2008."
Total visitor arrivals for this year will slip 0.8 percent from 2006, compared with a 0.3 percent decline in its previous forecast, the report said. In 2008, visitor arrivals are now expected to grow 1 percent, down half a percentage point from last quarter's forecast.
The total number of visitors arriving by air to Hawaii was flat in the third quarter from last year at 1.98 million, with an increase in international arrivals being offset by a decrease in the domestic market. The 2007 forecast for total visitor expenditure growth has been revised down to 2.0 percent from 2.6 percent in August, the report said.
The forecast for Honolulu's inflation, as measured by the consumer price index, is unchanged at 4.5 percent for 2007 and 3.8 percent for 2008. Consumer prices for the first half of this year increased 5 percent, according to the U.S. Bureau of Labor Statistics, more than double the 2.4 percent gain for the entire nation.
The state's 2007 forecast for real personal income growth, when corrected for inflation, remains unchanged from the August forecast of 1.8 percent. In 2008, real personal income is projected to grow 1.8 percent, down 0.1 of a percentage point from the previous forecast.
A third-quarter slump in non-government employment growth from the previous two quarters pushed down the 2007 forecast of wage and salary job growth to 1.9 percent from 2 percent. The job growth forecast for next year is steady at 1.5 percent.
Construction was one of the major contributors to job growth, the report said. The natural resources, mining and construction sector added 1,750 jobs, an increase of 4.8 percent and are at the highest level ever at 38,100.
Jobs in the professional and business services sector grew 4.8 percent from last year, while health care jumped 2.7 percent in the quarter.
The 2007 forecast for Hawaii's real GDP growth is also left unchanged at 2.9 percent. In 2008, real GDP is projected to grow 2.8 percent, down 0.1 percent from August, the report said.