Hawaii is halfway through the final quarter of the year with economic signs showing it is wrapping up what could be considered a mediocre economic year.
Even the state’s own Department of Business, Economic Development and Tourism (DBEDT) noted in a March report that Hawaii was showing an “expected slowdown in tourism growth, higher projected consumer inflation and increasing policy uncertainty at the national and international levels.”
Folks hoping for good news in Hawaii, according to the report, will have to focus on “the strong performance of construction, real estate, health care, professional services, and the continued recovery of tourism.”
Compared to other states, Hawaii shows an economic rating that is mostly lukewarm — not too good, but not crashing and burning.
“The U.S. economy has fully recovered since the first quarter of 2021. Hawaii was the second-slowest state in terms of economic recovery from the 2019 COVID recession,” the
report said.
“Compared to 2019, statewide non-agriculture annual average payroll jobs were still short by 20,900 jobs in 2024. However, construction annual average payroll jobs were above 2019 levels by 4,000 jobs,” the report said.
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If Hawaii’s economy is fueled by the spending of tourists from the mainland and overseas coming here, now is the time to get out “Welcome to Hawaii” signs.
“Total visitor arrivals recovered 93.3 percent from the levels of 2019. Visitors from the U.S. increased by 6.7 percent, while international visitor recovery was 64.9 percent. The recovery rate of Japanese visitors was 45.7 percent and for Canadian visitors, the recovery rate was 80.2 percent,” the report said.
Officials were not saying they were alarmed by the weak numbers from two of Hawaii’s reliable sources of free-spending visitors, Canada and Japan. Fire-damaged Maui continues to be a concern for tourism growth or stability. While Oahu and the other islands are reporting near normal figures, Maui is not showing a significant recovery.
The hard numbers show that Hawaii is just not back to normal. The University of Hawaii Economic Research Organization is calling it a “mild recession” even as state economists, while more optimistic, cut the growth rate forecast to just 1.3%-1.7%.
Japan and Canada concerns show that tourists from Japan still aren’t coming back after the pandemic, with the number of Japanese tourists remaining stuck at less than half of what it was in 2019. To add to the economic worry, Canadian arrivals are now down by as much as 9% this year due to Canada’s recession, the report said.
The key point in all the gloomy financial stats is that if Hawaii is to escape the economic peril, it will do so by getting out the shovels and hammers and forget about the leis and mai tais. It appears that what Hawaii needs is more construction.
Statistics in the construction industry were great in 2024 and will have positive impacts on activities in 2025 and beyond. DBEDT estimates that construction activity in 2025 will be stronger.
“The strength in construction and some non-tourism sectors is helping to mitigate the slump in the visitor industry, but the year is concluding on a cautious note,” the state said.
Of course, if construction is going to lead the recovery, then there is no bigger or stronger engine to pull Hawaii out of a slump than Oahu’s own Honolulu Authority for Rapid Transportation project, now pegged at $11 billion.