The Department of Business, Economic Development and Tourism (DBEDT) released its third quarter 2019 economic report today, detailing the state of Hawaii’s economy and forecasting future growth.
The general fund of tax revenue saw a record-setting start to the year, with $4.4 billion deposited from January through July. “We are pleased to see that our tax revenue growth is still strong,” said DBEDT Director Mike McCartney.
The national trade war with China has had a negative impact on both consumer prices and the number of Chinese tourists, but those hits were offset by slightly lower gas prices and an increase in mainland visitors.
The vacation rental ban on Oahu has yet to have a noticeable effect on visitor arrival numbers; total passengers thus far in August have grown by 4% compared to this time last year, while passengers from the mainland increased by 8.7% compared to last August.
One of the biggest potential challenges facing the state is the decline in private building permits, which could mean slowdowns in the construction industry in the near future. As of now, however, the construction industry is still adding jobs.
Hawaii has a low unemployment rate, but also a low growth rate of personal income. Between 1998 and 2018, Hawaii’s average personal income growth rate was 4.4%, just above the average rate of inflation (2.18%) in the same period.
The DBEDT forecasts 1.1% growth for the remainder of 2019, and between 1.2-1.3% for the following years. They also predict a 3.5% increase in visitor arrivals for the rest of 2019, and between 1.5-2% for the years afterward.
You can read the full report here.