(The Center Square) – The latest economic forecast from the Hawaii Department of Business, Economic Development and Tourism shows the state’s economy will grow by 1.5% in 2024, a slight increase from the previous prediction of 1.3%.
The increase is attributed to household spending growth.
“The primary driver of household spending was a 6.0 percent increase in personal income during the first three quarters of 2023 (latest data available),” DBEDT said in its report. “Wages and salaries, the largest component of personal income, increased by 7.4 percent during the period, double the average growth rate of the past 20 years (2002-2022).”
The growth is slower than the rest of the U.S. and less than last year’s, according to the department. It will take about seven years before the state’s tourism industry and job count returns to pre-pandemic levels. The impact of the Maui fires is also expected to linger for a few years, according to a statement from DBEDT Director James Kunane Tokioka.
“During this recovery period, governments play an important role in the economy,” Tokioka said. “The level of government contracts awarded in 2023 reached an all-time high of $5 billion, including contracts awarded by all three levels of government. These government contracts will help our construction industry in 2024 and in future years. The state government has been spending an average of $1.4 billion a year on capital improvement projects during the past 10 years and the construction industry is believed to be further boosted by the Governor’s affordable housing initiatives.”
The report does show some signs of improvement in tourism numbers.
“The recovery of airlift from Japan and other international destinations is promising, and we saw the passenger count from Japan increase by 84 percent during the first two months of 2024 compared to the same period a year ago,” Tokioka said. “As we expected, the passenger count from Japan in the first two months of 2024 reached more than 60 percent of the level from same period in 2019. We are hopeful that this trend will continue for the rest of the year.”
