Outlook for the Economy
1st Quarter 2025 Report
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As measured by real gross domestic product (GDP), Hawai‘i’s economy rebounded to exceed pre-pandemic (first three quarters of 2019) levels by 1.5 percent during the first three quarters of 2024. While tourism-related sectors (accommodation, food services transportation, retail trade, and recreation) only recovered to 94.5 percent of pre-pandemic levels as of the third quarter of 2024, non-tourism sectors have shown firm growth. With policy uncertainty at the national and international levels, the resilience of Hawai‘i’s economic growth in the next few years will rely on the strong performance of construction, real estate, health care, professional services, and the continued recovery of tourism.
The construction industry continues booming. Construction industry payroll jobs increased 9.2 percent in 2024 as compared with 2023. The value of all building permits approved in 2024 increased by 27.1 percent from 2023. The number of residential housing units authorized in 2024 increased by 78.1 percent as compared with 2023 and the state contracting tax base increased 20.3 percent during the first 10 months of 2024 from the same period in 2023.
After declining 26 percent in 2023, Hawai‘i home sales increased 15.1 percent during 2024. Sales of single-family homes increased 14.3 percent and sales of condominium homes increased 15.9 percent. The average sale price increased 8.1 percent for single family homes and 5.7 percent for condominium homes from the year before.
In 2024, the unemployment rate decreased 0.1 percentage point from the previous year’s 3.0 percent, to reach 2.9 percent. In 2024, average non-agricultural wage and salary jobs increased 0.9 percent or 5,500 jobs from the previous year.
According to the airline schedules, total air seats to the state will decrease by 1.1 percent during the first 10 months of 2025. The number of air seats on international flights is expected to decrease by 5.5 percent during the first 10 months of 2025 as compared with the same period in 2024. The increase in scheduled air seats from the U.S. mainland during the first 10 months of 2025 is 0.1 percent.
Honolulu consumer inflation, as measured by the Honolulu Consumer Price Index for Urban Consumers (CPI-U), was 4.4 percent in 2024, 1.4 percentage points higher than the state’s inflation rate in 2023 and 1.5 percentage points above the national inflation rate of 2.9 percent.
At the national level, U.S. real GDP increased 2.8 percent in 2024 from 2023. The most recent economic projections by the top 50 economic forecasting organizations, published in Blue Chip Economic Indicators (February 2025), indicate that U.S. economic growth is expected to be 2.2 percent in 2025 and 2.0 percent in 2026. DBEDT estimates that Hawai‘i’s real GDP will increase by 1.7 percent in 2025. The forecast then projects 2.0 percent growth in 2026, 1.9 percent in 2027, and 1.8 percent in 2028.
Visitor arrivals are projected to increase by 1.0 percent in 2025 and will grow at a stable pace of around 2 percent each year between 2026 and 2028. Full recovery in arrivals will not happen until 2028 when 10.4 million visitors will come to the state. Visitor spending is projected to be $21.3 billion in 2025 and to increase to $23.7 billion by 2028.
Non-agriculture payroll jobs are estimated to grow by 1.2 percent in 2025. The forecast projects increases of 1.1 percent in 2026, 1.0 percent in 2027 and 0.9 percent in 2028.
The state unemployment rate is expected to be 2.9 percent in 2025 and will improve to 2.7 percent in 2026, and to 2.6 percent in 2027 and 2028.
Nominal personal income is estimated to increase by 4.9 percent in 2025. The forecast then projects an increase of 4.8 percent in 2026, 4.6 percent in 2027, and 4.5 percent in 2028.
As measured by the Honolulu CPI-U, inflation is expected to be 3.9 percent in 2025, which is higher than the projected U.S. consumer inflation rate of 2.7 percent for the same year. Hawai‘i consumer inflation is expected to decrease to 2.9 percent by 2028.
Hawai‘i’s population is expected to increase by 0.2 percent each year for 2025 and 2026 and by 0.3 percent each year for 2027 and 2028.
| Economic Indicators | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 |
|---|---|---|---|---|---|---|
| Actual | Forecast | |||||
| Total population (thousands) ² | 1,441 | 1,446 | 1,449 | 1,452 | 1,456 | 1,460 |
| Visitor arrivals (thousands) ³ | 9,658 | 9,689 | 9,786 | 9,982 | 10,201 | 10,416 |
| Visitor days (thousands) ³ | 86,426 | 84,340 | 84,938 | 86,284 | 87,843 | 89,487 |
| Visitor expenditures (million dollars) ³ | 20,866 | 20,819 | 21,343 | 22,080 | 22,895 | 23,747 |
| Honolulu CPI-U (1982-84=100) | 326.0 | 340.2 | 353.5 | 365.8 | 376.8 | 387.6 |
| Personal income (million dollars) | 94,971 | 100,855 | 105,811 | 110,866 | 116,007 | 121,175 |
| Real personal income (millions of constant 2017$) | 72,620 | 74,019 | 75,187 | 76,403 | 77,728 | 79,063 |
| Personal income deflator | 130.8 | 136.3 | 140.7 | 145.1 | 149.2 | 153.3 |
| Non-agricultural wage & salary jobs (thousands) | 632.2 | 637.7 | 645.5 | 652.5 | 658.8 | 664.7 |
| Civilian unemployment rate | 3.0 | 2.9 | 2.9 | 2.7 | 2.6 | 2.6 |
| Gross domestic product (million dollars) | 110,265 | 116,174 | 121,621 | 127,186 | 132,763 | 138,476 |
| Real gross domestic product (millions of chained 2017$) | 88,614 | 90,298 | 91,833 | 93,670 | 95,449 | 97,168 |
| Gross domestic product deflator (2017=100) | 124.4 | 128.7 | 132.4 | 135.8 | 139.1 | 142.5 |
| Annual Percentage Change | ||||||
| Total population | 0.1 | 0.3 | 0.2 | 0.2 | 0.3 | 0.3 |
| Visitor arrivals | 4.6 | 0.3 | 1.0 | 2.0 | 2.2 | 2.1 |
| Visitor days | 1.4 | -2.4 | 0.7 | 1.6 | 1.8 | 1.9 |
| Visitor expenditures | 5.4 | -0.2 | 2.5 | 3.5 | 3.7 | 3.7 |
| Honolulu CPI-U | 3.1 | 4.4 | 3.9 | 3.5 | 3.0 | 2.9 |
| Personal income | 5.5 | 6.2 | 4.9 | 4.8 | 4.6 | 4.5 |
| Real personal income | 3.9 | 1.9 | 1.6 | 1.6 | 1.7 | 1.7 |
| Personal income deflator | 1.5 | 4.2 | 3.3 | 3.1 | 2.9 | 2.7 |
| Non-agricultural wage & salary jobs | 2.3 | 0.9 | 1.2 | 1.1 | 1.0 | 0.9 |
| Civilian unemployment rate 4 | -0.3 | -0.1 | 0.0 | -0.2 | -0.1 | 0.0 |
| Gross domestic product | 6.9 | 5.4 | 4.7 | 4.6 | 4.4 | 4.3 |
| Real gross domestic product | 2.0 | 1.9 | 1.7 | 2.0 | 1.9 | 1.8 |
| Gross domestic product deflator | 4.8 | 3.4 | 2.9 | 2.5 | 2.4 | 2.5 |
2/ July 1 count.
3/ Visitors who came to Hawaii by air and by cruise ship. Expenditures includes supplementary business expenditures.
4/ Absolute change from previous year.
Source: Hawai‘i State Department of Business, Economic Development and Tourism, March 5, 2025.