Hawaii’s population decline could affect the economy

HONOLULU (AP) — For the first time since statehood in 1959, Hawaii’s population has declined for two consecutive years with fewer births, more deaths and a greater number of residents moving to the mainland.

That comes with all sorts of implications, including a decreasing demand for housing, which could lead to a slowdown or drop in home prices, as well as a shrinking workforce in an already tight labor market. The unemployment rate in the islands has hovered around 2 percent for most of the past year.

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The trend is alarming because without enough people economic growth could be affected, said Eugene Tian, state economist with Department of Business, Economic Development and Tourism.

“That is something significant because with fewer people it helps a little bit in the housing shortage, but there will definitely be less spending consumption — and that will reduce economic growth,” said Tian, adding that 70 percent of gross domestic product is due to consumer spending. “Because the U.S. economy in the last two years has been growing faster than in Hawaii, people are looking for more opportunities and a lower cost of living.”

The state population dropped by 3,712, or 10 people per day, from July 2017 to July 2018. There were 17,326 births, 12,660 deaths and 4,075 people migrating to the islands from foreign countries. And 12,430 residents left Hawaii for the mainland during that time.

“Hawaii traditionally does lose people from domestic migration, every year since 2010,” said Luke Rogers, chief of the population estimate branch at the U.S. Census Bureau. “Hawaii actually gained people by having more births than deaths. But the losses due to net domestic migration offset both combined. Hawaii’s population declined in the last year primarily because of domestic migration.”

And there were fewer births each year over the past decade.

“That means our natural increase — births minus death — is slowing down. That’s a change in social behavior,” Tian said.

Meanwhile people in the state are also getting older.

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Those 65 and older accounted for 17.8 percent of the population in 2017, ranking Hawaii the seventh-oldest state in the nation.

Hawaii’s population dropped by about 3,900 people from July 2016 to July 2017.