Slower tourism and construction have taken a toll on the Hawaii County economy, according to the latest economic forecast from First Hawaiian Bank.

After an 11-year expansion, the Big Island economy has weakened in several major sectors compared to a year ago.

Like the rest of the state, Hawaii County is suffering from unexpected blows to tourism due to the loss of air carriers and cruise ships, an accelerating downturn in construction, slumping real estate sales and the impact of the Wall Street financial crisis.

But the Big Island is also feeling the vog's impact on diversified agriculture on top of higher transportation and energy costs.

First Hawaiian Bank economic adviser Leroy Laney summarized the following at an economic outlookforum yesterday at Hilo Hawaiian Hotel and the Waikoloa Beach Marriott.

The labor shortage is history, he said, and employers on the Big Island no longer report finding qualified workers as their No. 1 problem. Hawaii County's unemployment rate, at 4.4 percent, is higher than the state average.

Big Isle tourism slumped along with the rest of the state, with an 8.8 percent drop in visitor arrivals, and 2.4 percent decline in visitor spending for the first half of this year.

Big Island construction, which peaked in 2006, is still on a downward decline at an accelerated pace in 2008. The residential construction market is expected to bottom out in 2009, with more activity coming in 2010 due to local demand.

“;Even if the Hawaii County economy avoids an overall shrinkage, it may feel like one after the recent boom years,”; said Laney. “;At junctures such as this, it is important to remember that the business cycle cannot be repealed. It will always have ups and downs, even though we tend to forget the downs when we are in the up cycles.”;

On the positive side, Laney noted that Kona coffee continues to command good price trends. The Mauna Kea Beach Hotel on the West side is also expected to reopen after repairing damage from the 2006 earthquake.