Isle economy to grow
3.1% this year
Surging visitor arrivals and growth in construction have put the state's economy on course for solid gains in jobs and personal income in 2005, according to the latest forecast by the state Department of Business, Economic Development and Tourism.
In its forecast, released yesterday, the state said it expects Hawaii's economy to improve even more than was previously predicted in November. Expected growth in the U.S. mainland and Japanese economies are expected to give the state a boost.
Real gross state product -- the inflation-adjusted value of all the goods and services produced in Hawaii -- is expected to rise 3.1 percent this year, half a percentage point better than the last forecast.
"Thanks to continued strength in construction and tourism, federal spending and the pro-business initiatives of the Lingle-Aiona administration, we expect to see more than 10,600 new wage and salary jobs created in the state during 2005," said Ted Liu, director of DBEDT.
The tourism industry is expected to host a record 7.2 million visitors in 2005, up 3.4 percent from a near-record 6.9 million in 2004. Visitor spending should reach $11.2 billion in 2005, 4.4 percent higher than 2004.
"First quarter was a golden quarter," said Barry Wallace, senior vice president of operations for Outrigger Hotels & Resorts. "It was anticipated to be strong and it came in even stronger -- way ahead of last year."
The visitor industry's strong occupancy levels have boosted hiring to the point where the closure of approximately 480 Outrigger guest rooms in January and the impending shutdown of 880 more rooms in April for redevelopment has not prompted layoffs, Wallace said.
Jobs have grown in traditional office, hotel, real estate and construction sectors and new areas such as cruise ships, television and movies.
However, companies are finding it harder to fill jobs and can't expand without key talent in place, said Judy Bishop, general manager of CTA Staffing.
"It's a double-edged sword that could cut into productivity for Hawaii companies," Bishop said.
Meanwhile, residents will find that inflation will temper their income growth. Price increases will hold this year's gain in personal income to 2.7 percent in inflation-adjusted terms.