Visitor arrivals expected to decline by 6.7%
The state again made a number of downward revisions to its quarterly economic forecast late last week, with personal income, total wage and salary jobs, and state gross domestic product likely to grow less than expected.
State’s 2008 economic forecast
» Wage and salary job growth:
» Real personal income growth: 0.4 percent
» Inflation: 4.5 percent
» Real GDP growth: 1.9 percent
» Visitor arrival decline: 6.7 percent
It is a continuation of economic scalebacks this year by the state, which said the shutdown of Aloha and ATA airlines and the departure of two NCL Corp.
cruise ships from the isle market are expected to cause declines visitor arrivals in 2008.
Isle visitor arrivals are now expected to decline 6.7 percent this year, more than double a 3 percent decrease forecast in May's state Department of Business, Economic Development & Tourism report. A 0.8 percent decrease in total visitor arrivals is expected in 2009, followed by 1.4 percent and 1.7 percent growth in 2010 and 2011, respectively.
"We are experiencing an economic adjustment here in Hawaii," DBEDT Director Theodore Liu said in the report. "However, we are not predicting a dramatic downturn. In fact, we are still expecting to see modest economic growth in the state."
Real gross domestic product is projected to grow 1.9 percent in 2008 and 2 percent in 2009, respectively, down 0.4 and 0.2 of a percentage point, respectively.
The Honolulu consumer price index is expected to rise 4.5 percent in 2008, 0.3 of a percentage point higher than in the previous forecast. The index, a benchmark for inflation, is expected to rise 3.5 percent next year, 0.2 of a percentage point higher than expected.
That higher inflation rate pushed down revisions in real income growth by 0.4 of a percentage point to 0.4 percent in 2008.
In 2009, real personal income is projected to grow 0.8 percent, down 0.3 of a percentage point from the previous forecast.
In response to slower job growth in the latest quarter and lower forecasts of visitor arrivals, the 2008 forecast of wage and salary job growth has been lowered to 0.2 percent from 0.4 percent in the previous forecast, the report said. The job growth forecast for 2009 also decreased to 0.5 percent from 0.8 percent in the previous forecast.