The state's new forecast for tourism, personal income, jobs and state gross domestic product paints an even gloomier picture than the previous forecast, but the report predicts a few bright spots in the economy.

The number of tourists coming to Hawai'i is expected to decline 10.1 percent this year, more than the 6.7 percent decline in the state forecast released three months ago. The number of wage and salary jobs is now projected to be unchanged from last year. Three months ago, the forecast was for a 0.2 percent increase.

The forecast is the latest by economists showing the body blow to the Islands by a series of shocks including record oil prices, the subprime mortgage crisis, big layoffs at several Island employers and — during the past three months — the financial crisis on Wall Street.

More gloomy forecasts are expected today and tomorrow when First Hawaiian Bank and the University of Hawai'i Economic Research Organization release their economic prognosis for the state.

"Hawai'i's economy has so far avoided the degree of economic slowdown experienced nationally," Ted Liu, director of the state Department of Business, Economic Development and Tourism, said in a statement.

"However, the impact of the financial uncertainties can be seen in the slowing of our construction and tourism sectors, and will impact the state's economy through next year."

Liu said there are a few places in the economy that are positive, including continued federal and military spending as well as state government's effort to accelerate building projects at airports, harbors, schools and elsewhere. And inflation is projected to be lower in the newest forecast.

But the overriding story in the newest forecast is that Hawai'i's hard economic slog hasn't gotten better in recent months, and that the disheartening economic climate will continue into next year as visitor arrivals fall along with incomes and jobs.

"DBEDT is forecasting virtually no growth in Hawai'i's economy through most of 2009," the forecast said.

"Assuming national growth turns positive around midyear 2009, Hawai'i's economy should begin seeing some improvement later in that year and modest growth in 2010."

The report noted that a slowing of the economy had occurred during the third quarter and was primarily the result of the worsening national economy and decline of the tourism industry.

It said the average number of civilians who were unemployed rose by almost 58 percent to 29,500 during the July-September quarter, and that the third quarter's unemployment rate of 4.4 percent was 1.5 percentage points higher than a year earlier. The slower job growth prompted a revision of job numbers downward for this year and for a decline next year.

Key drivers of Hawai'i's economy are found in the U.S. and Japanese economies, both of which have had their outlooks lowered recently. DBEDT said that prompted its economists to cut their earlier forecasts for this year and next. They projected Hawai'i gross domestic product will grow 0.3 percent this year when adjusted for inflation, they said.

That was 1.6 percentage points less than the prior forecast and lower than the 1.4 percent growth for U.S. gross domestic product as cited by Blue Chip Economic Consensus Forecasts.

Next year, DBEDT forecasts, Hawai'i GDP will be flat with this year, which is better than the 0.4 percent decline forecast for the nation.

Other estimates included in the new forecast: