Hawaii’s economy showed better-than-expected performance in 2024, driven primarily by a booming construction industry, with predictions pointing to 2% growth in 2025, according to the state’s Department of Economic Business and Development (DBEDT).

Initially, economists predicted a 1.5% growth for Hawaii's economy in 2024, adjusting down to 1.3% for the second and third quarters. However, DBEDT's fourth-quarter forecast raised expectations, now predicting a 1.6% growth, with the state set to grow by 2% annually from 2025 through 2027.

As Hawaii recovers from the effects of COVID-19 and the 2023 Maui wildfires, construction stands as a leading force in the state's economic recovery. DBEDT emphasized that “construction continues booming” and will remain a primary driver for growth over the next few years. “The main drivers for economic growth in 2025 will be construction, real estate, and the continued recovery of tourism,” the report stated.

Key projects driving the state's construction boom include a new Oahu Community Correctional Center, a proposed Aloha Stadium replacement, the final rail station and overhead rail guideway in Kakaako, and housing developments, especially affordable units. Josh Magno, director of programs at Pacific Resource Partnership (PRP), highlighted the need for a 10% increase in construction workers to meet the high demand.

PRP advocates for recruiting new workers, especially high school graduates, who can "become a journeyman in four years and make $100,000 potentially while in your early 20s," according to Magno. The union is working to ensure local workers are prioritized and compensated fairly in line with union agreements, especially as competition grows from mainland companies bringing in labor.

Hawaii’s overall economy has returned to pre-pandemic levels by the third quarter of 2023, according to DBEDT. However, tourism-related sectors, including accommodations, transportation, and retail, are still lagging. Visitor arrivals for the first ten months of 2024 were at 92.8% of 2019 levels, with significant variations by island and market. Maui, in particular, lagged at 75.2%, while Oahu and Hawaii island showed stronger recoveries, with 94% and 98.4% of pre-pandemic arrivals, respectively.

Despite the challenges in other sectors, construction continues to lead Hawaii's economic recovery, with job counts in construction, private education services, and healthcare surpassing pre-pandemic levels.