DBEDT report cuts back outlook for isle economy
The state has cut back its economic outlook for the year, paring down projected rates of growth for personal income, jobs and gross domestic product.
State economists are projecting reduced growth in most measures of the economy, but no contraction except in visitor traffic.
Source: State Department of Business, Economic Development & Tourism
The quarterly economic report released yesterday by the state Department of Business, Economic Development and Tourism follows similar downward revisions by local economists following the recent shutdowns of Aloha
airlines and the loss of two NCL Corp.
ships from the Hawaii market.
DBEDT's new report projects total visitor arrivals for the year to fall 3 percent, compared to its previous 1.4 percent estimate, and 3.9 percent forecast by the University of Hawaii Economic Research Organization and Bank of Hawaii. DBEDT projects no growth in the visitor count in 2009.
Despite the lower forecast, DBEDT director Ted Liu said, "We believe that our economy will adjust to recent economic events and that our fundamental economic foundation remains strong."
Meanwhile, DBEDT expects real personal income -- adjusted for inflation -- to increase 0.8 percent in 2008, less than the 1.6 percent of its previous report, but higher than the 0.2 percent UHERO prediction and the bank's 0.1 percent forecast. DBEDT anticipates real personal income will grow 1.1 percent in 2009 mainly due to lower forecasts of nominal personal income.
The Honolulu Consumer Price Index, DBEDT's proxy for isle inflation, is expected to rise 4.2 percent this year, 0.2 percentage points higher than previous forecast, compared to Bank of Hawaii's 4.1 percent inflation forecast. DBEDT expects inflation for 2009 at 3.3 percent.
The state's wage and salary job growth forecast for 2008 has been lowered to 0.4 percent from 1.4 percent. That compares to a 0.2 percent reduction in job count predicted by UHERO and the 0.3 percent drop forecast by Bank of Hawaii. DBEDT's job growth forecast for 2009 is 0.8 percent.
In addition, real gross domestic product is expected to rise 2.3 percent in 2008 and 2.2 percent in 2009, down 0.2 and 0.3 percentage points, respectively.