The state is reiterating its view of a gradual brightening of the economy this year, given rosier tourism numbers.

The state Department of Business, Economic Development and Tourism's latest economic forecast again makes the case of a recovery being under way. Its revised forecasts project better days for tourism and personal income this year.

"Based on the updated U.S. and International outlook as well as new data on the Hawai'i economy, the revised forecast for Hawai'i shows slightly more encouraging expectations, although the basic projection of a slow and gradual recovery has not changed," said the report issued yesterday.

"Overall, Hawai'i's economy measured by real GDP (state gross domestic product adjusted for inflation) is projected to show a 1.1 percent increase in 2010, up slightly from a 0.9 percent growth forecast last quarter."

The projections are reassuring given Hawai'i's experience over the past two years as a number of notable companies went under, income fell and unemployment surged to levels not seen in more than three decades.

Going into summer last year, DBEDT economists had a string of economic forecasts revised downward with each quarterly update. But in recent months there's been a general consensus among economists that Hawai'i's pulling out of the economic nosedive.

"We are confident that we will continue to see improvement in our economy over the next few years," said DBEDT Director Ted Liu in a statement issued to the media.

"Jobs continue to be a lagging indicator and our efforts are focused on trying to create new jobs and improve the overall job market."

Indeed, the forecasts don't show a dramatic upturn in the economy over the next few years — just steady gains. Jobs are listed as coming later in the cycle, with construction work continuing to show declines.

"The key area of the economy that has yet to improve is the labor market, which is expected to be the last element of the economy to respond," the report said.

It projects wage and salary jobs will decline by slightly less than 1 percent this year, or about 5,500 jobs.

The report noted that most of this loss will occur early in the year, with job gains starting to be seen late in 2010.

The forecast noted that the news is not all bad for workers, because others are getting more hours. Because of that, DBEDT economists said, there will be a 0.2 percent rise in personal income when adjusted for inflation. Previously they had expected no increase this year.

The gain is attributed in part to an improving tourist industry, driven by improving economies on the Mainland and in Japan, Hawai'i's main market for foreign visitors.

Forecasts are being revised upward in terms of two key industry metrics —visitor arrivals and spending. Tourism arrivals are now expected to grow by 2.6 percent this year; previously, they were forecast to rise 2 percent.

As for visitor expenditures, those are projected to jump to 4.9 percent this year. That's more than double what DBEDT projected when it released its previous forecast in February.