Isle economy grew only 0.7 percent last year
BY Greg Wiles
Advertiser Staff Writer
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Hawai'i's economic growth last year was the lowest since 1999, according to new figures released by the U.S. Bureau of Economic Analysis.
The state's gross domestic product rose by 0.7 percent last year when adjusted for inflation. The last time growth was lower was 10 years ago, when the economy was coming out of the economic doldrums that afflicted Hawai'i during the 1990s.
The meager growth last year should be no surprise to those who've followed the state's deteriorating economy over the past 18 months, amid one of the sharpest downturns in the visitor industry on record. Visitor arrivals have been down for 14 straight months, in comparison to the same months a year earlier, and state economists are predicting that both arrivals and visitor spending won't begin recovering until next year at the earliest.
The state's economy also has been hit by slowing construction and rising unemployment. The various economic indicators are reflected in Hawai'i's gross domestic product, an often-cited barometer of economic health or contraction.
"It's just yet another indicator of the overall slowdown," said Sam Slom, a private consulting economist, who also serves as a state senator and is executive director of the business group Smart Business Hawaii.
Slom said the economic environment has continued to deteriorate this year as a recession takes its toll on California and other economies related to the state.
"When we start looking at this year's figures, we'll see we had it pretty good. We're finding out we're more dependent on other economies than before."
Hawai'i's 2008 growth rate adjusted for inflation mirrored that of the national average of 0.7 percent and was the 27th-highest increase nationally.
Nebraska had the greatest increase at 7.3 percent. Alaska, reflecting a decline in petroleum extraction, was the worst at minus-2.0 percent.
Hawai'i state economist Pearl Imada Iboshi said the numbers show Hawai'i faring better than some other states in the economic downturn. Even with the difficulties here, the state has been around the national average in personal income growth and now GDP growth.
"Overall, I think we're holding our own," she said.
Other figures released by the Bureau of Economic Analysis:
State GDP is defined by the Bureau of Economic Analysis as the sum of value added from all industries in the state.
The downturn in GDP experienced here is expected to continue this year. The state Department of Business, Economic Development and Tourism is projecting visitor arrivals will fall by 5.9 percent, and that total wage and salary jobs will shrink by 2.1 percent.
That led DBEDT to project that GDP adjusted for inflation will decline by 1.6 percent in 2009. DBEDT, using figures from a national economic forecasting service, is projecting the national economy will fall by 2.8 percent this year.
"We're doing better than some other places," Iboshi said.
Slom said he agrees that the state's GDP will contract this year. He said the current recession is the worst he's seen here in the 50 years he's lived in Hawai'i.
"There's never been anything like we're going through now," he said.
