Research & Economic Analysis

2nd Quarter 2025 Report

Download Data Table (spreadsheet)

As of the fourth quarter of 2024, Hawai‘i’s real gross domestic product (GDP) rebounded to 1.9 percent above the pre-pandemic level in the fourth quarter of 2019. Tourism-related sectors, including accommodation, transportation, retail trade, recreation, and food services, had only reached 94.3 percent of their pre-pandemic GDP levels by the end of 2024. In contrast, non-tourism sectors grew by 4.4 percent over the same period. Near term economic growth will be impacted by a slowdown in tourism, persistent consumer inflation, and uncertainty at the national and international levels. Hawai‘i’s economic resilience will depend on sustained strength in construction, real estate, health care, and professional services as tourism is projected to recover at a slower pace.

During the first four months of 2025, Hawai‘i’s labor market was one of the best in the nation, with unemployment rate ranked 5th lowest based on the seasonally adjusted rate and ranked 2nd lowest based on the not seasonally adjusted rate. Hawai‘i payroll job growth ranked the 4th highest in the nation during this period.

Construction continues to serve as a key driver of economic growth in Hawai‘i. In January 2025, the latest tax base data available, the contracting tax base increased 43.8 percent as compared with the same month a year ago. The number of residential units authorized statewide, during the first quarter of 2025, increased 89.8 percent from the same period a year earlier, with all counties seeing increases in authorized residential units.

After increasing 15.1 percent in 2024, Hawai‘i home sales decreased 27.2 percent during the first quarter of 2025. Sales of single-family homes decreased 23.7 percent and sales of condominium homes decreased 30.4 percent. The average sale price of single-family homes during the first quarter of 2025 increased 7.8 percent increase compared to the first quarter of 2024 while the average sale price for condominium homes decreased 1.6 percent from the same quarter a year ago.

The visitor industry performed well during the first quarter of 2025 with visitor arrivals increasing 1.7 percent and visitor expenditures increasing 6.5 percent compared to the first quarter of 2024. According to the airline flight schedule, however, the total number of air seats to Hawai‘i is expected to decline by 0.5 percent in 2025. This decrease is primarily driven by fewer international flights, especially from Japan. International seat capacity is projected to drop by 3.5 percent overall. Flights from the continental United States are expected increase by 0.3 percent.

According to the most recent (May 2025) economic projections by the top 50 economic forecasting organizations published in Blue Chip Economic Indicators, U.S. economic growth is expected to be 1.2 percent in 2025 and 1.5 percent in 2026. DBEDT estimates that Hawai‘i’s real GDP will increase by 1.2 percent in 2025. The forecast then projects 1.5 percent growth in 2026, 1.8 percent in 2027, and 1.8 percent in 2028.

Visitor arrivals are projected to decrease by 0.1 percent in 2025, grow by 0.7 percent in 2026, and then grow at around 2 percent each year in 2027 and 2028. Visitor spending is projected to be $21.2 billion in 2025 and to increase to $22.8 billion by 2028.

Non-agriculture payroll jobs are estimated to grow by 0.9 percent in 2025.  The forecast projects increases of 0.8 percent in 2026, 1.0 percent in 2027 and 0.9 percent in 2028.

The state unemployment rate is expected to be 2.9 percent in 2025 and 2026. The unemployment rate will improve to 2.8 percent in 2027, and to 2.7 percent in 2028.