Market Snapshot: Hawaii

Market Snapshot: Hawaii

50 states in 50 weeks – This series leverages our market intelligence database to bring you powerful AE industry insights. Each week, we highlight a new state in green while previously featured states fade to a lighter green. Next, let’s look at Hawaii.

Hawaii Economic Performance and Outlook Grade*: D

• Economy: B
• Population: D
• Workforce: B
• Financial/Fiscal Health: D

* Overall grade is assigned based on a curve (relative to all states’ performances).

After enduring the COVID-19 pandemic and 2023 Lahaina wildfire, Hawaii’s resilience will be tested again. Heavily dependent on tourism, the Aloha State sustained the second-slowest pandemic recovery, according to the Hawaii Department of Business, Economic Development & Tourism. International visits remain far below pre-pandemic levels. Still, Hawaii’s construction industry demonstrated the strongest job growth of any sector in 2024 with residential housing unit authorizations soaring 78% to a 17-year high. Hawaii sported the fifth-lowest unemployment rate as of March 2025, according to the U.S. Bureau of Labor Statistics, and ConstructConnect forecasts it will rank second in CAGR of construction starts through 2029. D.C. doings have an outsized impact on Hawaii. Federal grants account for 20% of the state budget, according to the University of Hawaii Economic Research Organization (UHERO), and 5% of the state’s workforce lost jobs in federal layoffs. The good news: Hawaii accounts for 8% of the federal military construction budget, and the Indo-Pacific Command based in the state is exempt from federal cutbacks. Due to federal policy and its impact on international tourism, UHERO forecasts a mild recession for late 2025 into 2026 with 1.1% growth in 2025 and a 0.3% dip next year. See below for regional highlights in Hawaii:

• Oahu: Work continues on Honolulu’s $10 billion Skyline rail system and the $3.4 billion Pearl Harbor Naval Shipyard Dry Dock 5, the most expensive project in the U.S. Navy’s history. Plans call for a $1.2 billion Oahu Community Correctional Center replacement in Halawa and a 98-acre mixed-use development tied to Aloha Stadium’s demolition and replacement.
• Maui: Affordable housing construction and the rebuilding of Lahaina following the wildfire that killed more than 100 and destroyed 3,500 homes are top priorities. Hawaii Electric is investing $190 million in power grid resilience and improvements.

For sector-specific data and insights for Hawaii or questions about our market intelligence and research services, call/text Rafael Barbosa at 972-266-4955 or email [email protected].

For a comprehensive outlook for 2025, you can access the 2025 AE Market Intelligence Webinar (recorded on January 28). Click here for details.