Aloha Chamber Members,
It has been a pleasure to serve as your Economic Development Chair and welcome incoming Chair UH-Hilo Chancellor Bonnie Irwin and Co-chair Kapono Pa. I appreciate the membership’s patience and understanding as I transitioned to the County of Hawaii. As our County and State navigate the evolving economic landscape, our community continues to demonstrate the resilience, ingenuity, and aloha spirit that have long defined the Hawaii Island business community.
This year we were able to host various speakers and topics at our meetings, including:
• Hawai’i County Comprehensive Economic Development Strategy
• Workforce Development with the American Job Center Hilo
• Invasive Species with the Big Island Invasive Species Committee
• Geothermal Energy
• Maunakea Astronomy with UH Institute for Astronomy
• Federal Funding Cuts
The work to support our small businesses continues year-round through the dedication of our Executive Officer Carla Kuo and Membership and Marketing Assistant Christina Robledo, who work with various Chamber committees to hold valuable after-hours events to learn about businesses, arrange Economic Forecasts, host workshops, and organize Chamber Cash Mobs.
As we end this fiscal year, I’d like to provide a picture of where our State and Hawai’i Island economy stands:
State of Hawai’i
Hawai’i’s economy is facing significant uncertainty due to federal policy changes. Recent economic forecasts warn that federal layoffs could impact an estimated 2,200 jobs statewide, representing about 5% of Hawai’i’s federal workforce, with additional risks from federal contract cuts and reduced grant funding.
The University of Hawai’i has already seen 76 programs terminated or receiving stop-work orders, affecting over 70 employees and approximately $78.2 million in funding. Confirmed federal funding cuts to Hawai’i state and county programs currently total nearly $95 million, impacting everything from broadband expansion to community development programs.
State economists have lowered Hawai’i’s economic growth projection for 2025 to 1.7%, down from the previously estimated 2.0%, citing policy uncertainty at national and international levels.
Looming tariffs and the constant negotiation of reciprocal tariffs are creating fluctuating prices in the market for both consumer goods and commodities. The uncertain future of the military presence in the islands may negatively impact the economy. Ongoing attempts to regulate short-term vacation rentals may bring in more funds to counties but could reduce tourism opportunities.
On the positive side, the construction industry continues to grow in 2025, with increases in building permits, approved housing projects, and construction jobs. In 2024, total construction value reached $14 billion, representing a 17.8% increase from 2023, although many construction companies are purchasing materials ahead of further tariff increases to reduce costs.
Hawai’i Island
Tourism remains the leading economic driver on our island, with visitor arrivals increasing 3.5% from April 2024. As of April 2025, 3.2 million visitors have arrived on Hawai’i Island. The market is slow to recover as visitors from Japan and Canada have not rebounded due to the weakening of the yen and ongoing economic conflicts with Canada. Efforts to move away from traditional tourism models, such as eco-tourism and agri-tourism, remain to be proven.
The healthcare, professional services, and creative industries are driving economic growth in 2025, particularly with the expansion of the Hilo Benioff Medical Center and the development of the Queen’s Kona Hospital. The arts, entertainment, and recreation sector is driving the labor market with a 12.5% increase from the same period in 2024.
There are still job openings across all sectors, indicating a strong labor market. Unemployment statewide is at 2.5%, close to the pre-pandemic level of 2.0%.
Overall Outlook
The defining word of the year is “uncertainty” as federal policy changes trickle down to the state level. The tourism industry outlook remains guarded as the Japan market still has not recovered to pre-pandemic levels. The State Legislature has appropriated $200 million in a rainy day fund to prepare for further federal cuts, created a special hiring program for federal workers, and is opening a special legislative session to support nonprofits.
As we look ahead, our community’s sense of aloha and commitment to supporting each other will endure. I encourage members to shop local, visit the farmers markets, and continue to stimulate our economy.
Mahalo again for your support of the Hawai’i Island Chamber of Commerce.
Dennis Lin
Vice President 2024-2025 & Economic Development Committee Chair
Sources of Information:
• https://dbedt.hawaii.gov/economic/economy-dashboard/
• https://www.civilbeat.org/2025/05/see-which-hawai%ca%bbi-agencies-have-been-hit-hardest-by-trump-funding-cuts/
• https://uhero.hawaii.edu/uhero-forecast-for-the-state-of-hawai%ca%bbi-federal-policies-push-hawaii-toward-mild-recession/
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