Personal incomes of Hawai'i residents rose 6.1 percent in the first quarter before adjustment for inflation compared with the first three months of 2006, according to figures released today by the U.S. Bureau of Economic Analysis.

The increase was in line with expectations of local economists who are predicting slightly higher income growth this year after adjustment for inflation. The latest forecast from the Department of Business, Economic Development and Tourism calls for a 1.8 percent increase in real personal income in 2007 after a 0.4 percent increase last year.

Hawai'i workers experienced slightly better income growth in the first quarter than the nation overall, which had income growth of 5.8 percent before adjustment for inflation during the period. In Hawai'i, utilities, construction, management and professional technical services experienced above-average income growth in the first quarter. Healthcare, accommodations and food sectors experienced less-than-average growth.

"The tourism-related areas are not doing very well, and that is not surprising given the plateau we've seen in the tourist market," said Byron Gangnes, a University of Hawai'i economist.

Hawai'i's $12 billion tourism industry is expected to experience flat or slightly lower visitor arrivals this year, followed by modest growth in 2008 and 2009.

A key concern going forward will be whether Hawai'i's relatively high inflation rate will continue to rise or begin to settle down. The purchasing power of Honolulu residents took a major hit last year as the inflation rate jumped to 5.8 percent, the highest rate in 15 years. The UH Economic Research Organization is forecasting a 4.8 percent rise in inflation this year, followed by a 3.8 percent rise in 2008.

In general income, job growth and visitor-arrival growth should continue at a moderate pace, barring an unforeseen economic jolt, economists say.

"We really don't see any warning signs of a deeper downturn," Gangnes said.

Reach Sean Hao at shao@honoluluadvertiser.com.