Maui wildfires continue to impact economic recovery; sluggish economic growth in 2024 forecast

The Maui wildfires continue to have pronounced impacts on the economic indicators for all counties, but especially Maui County, according to new information compiled by the state Department of Business Economic Development and Tourism. The information was part of the department’s second quarter 2024 Statistical and Economic Report.

DBEDT Director James Kunane Tokioka said, “Hawai‘i’s economy continues to recover from both the COVID-19 pandemic and the Maui wildfire tragedy. Though Hawai‘i has a lower unemployment rate (not seasonally adjusted) at 2.8% compared to the US rate of 3.5%, labor force and civilian employment dropped in all the counties during the first four months of 2024. Data on visitor arrivals, visitor expenditures, state general excise tax collection, and inflation also indicate that growth will be slower in 2024. However, it is encouraging to see strong growth in construction and continued growth in health care and social assistance jobs. Jobs in both sectors are at record-high levels.”

In the report, DBEDT revised its economic growth projections for 2024, as measured by the growth of real gross domestic product (GDP), downward from 1.5% projected in the previous quarter, to 1.3%. Projections for 2025-2027 remain at about 2% economic growth which is similar to the average annual growth rate during the 2009-2019 period.

The forecast for slower economic growth in 2024 is due to several factors including decreased air visitor arrivals and expenditures, higher-than-expected inflation, declines in the civilian labor force, and slower job growth, according to the report. During the first four months of 2024, total visitors to Hawai‘i declined by 3.9% compared to the same period in 2023. Statewide total visitor expenditures declined by 5.1% during the same period. 

“We remain steadfast in our support of the state’s and especially Maui’s economic recovery, recognizing that Maui County residents and businesses continue to experience higher unemployment, declines in the labor force, and job losses,” said Tokioka. “The increase in the value of residential private building permits for Maui County is positive and the opening of the County of Maui Recovery Permit Center at the end of April should streamline the permitting process for those seeking to rebuild. Targeted efforts are also underway to reinvigorate visitor travel to Hawai‘i, with an emphasis on supporting Maui. Although recovery will take time, there are signs that our economy will continue to improve and grow.”

Construction remains a bright spot for the economy, according to the report. In April 2024, construction added 3,300 jobs (not seasonally adjusted) compared to the same month in 2023. The construction industry is currently at a record high of 41,400 workers (not seasonally adjusted) statewide. Hawai‘i’s statewide unemployment rate (not seasonally adjusted) for April 2024 was 2.8%, lower than the US unemployment rate (not seasonally adjusted) of 3.5%.