State Economists See Continued Positive Economic Growth

Posted on May 10, 2013 in News

For Immediate Release: May 10, 2013
DBEDT News Release 13-03

HONOLULU—In its second quarter 2013 economic report, the Department of Business, Economic Development & Tourism (DBEDT) predicts continued positive economic growth in 2013, outpacing the national growth rate. DBEDT also expects to see continued positive growth in 2014.

“We continue to see strength in the overall economy – near previous estimates,” said DBEDT Director Richard C. Lim. “From our perspective, we believe Hawaii is poised for steady positive economic growth.”

While the current DBEDT forecast is slightly less optimistic than its February 2013 forecast for some of local economic indicators such as gross domestic product (GDP) growth, job growth, and visitor-related indicators, Hawaii’s overall growth rate is higher than what is being experienced nationally. In addition, the projected personal income growth and inflation rate are unchanged from the previous forecast.

Real GDP
The current forecast for 2013 real GDP for Hawaii is a 2.4 percent growth, and the real GDP growth in 2014 is now forecasted to grow 2.3 percent. Both are within 0.2 of a percentage point from the previous forecast.

For the United States, the consensus forecast by the top 50 economic forecasting agencies in April 2013 projects a 2.1 percent economic growth rate, higher than the 1.9 percent growth rate projected in February 2013. Forecasts for Japanese real GDP growth in 2013 were also more optimistic, which increased from 0.9 percent in the February 2013 forecast to 1.1 percent in the April 2013 forecast.

Job Growth
In the current forecast, Hawaii’s civilian unemployment rate is projected to improve one percentage point from 5.8 percent in 2012 to 4.8 percent in 2013.

The number of non-agricultural wage and salary jobs in Hawaii is now expected to increase 2.0 percent in 2013, 0.2 of a percentage point lower than the growth rate of non-agricultural wage and salary jobs in Hawaii projected in the previous forecast. Non-agricultural wage and salary jobs increased 1.9 percent in 2012.

Forecasts for 2014 are mostly unchanged compared with the previous forecasts. The non-agricultural wage and salary job count is currently expected to increase 1.8 percent, same as the previous forecast.

Visitors
Following very strong growth in visitor arrivals in 2012, DBEDT projects that overall visitor arrivals will increase by 4.3 percent for 2013, 1.1 percentage point lower than its previous forecast. Total visitor spending is now projected to increase 5.6 percent in 2013, 1.5 percentage points below the previous forecast.

The forecast for the growth of visitor days in 2013 was lowered from 5.3 percent to 3.1 percent, which is primarily attributable to the reduction in air seats from the U.S. Mainland.

The forecast for 2014 visitor arrivals remain unchanged at 2.5 percent in the current forecast. The forecast for visitor spending in 2014 was lowered 0.2 of a percentage point to 4.8 percent in the current forecast.

Other Indicators
DBEDT expects the Honolulu Consumer Price Index (CPI), a proxy for inflation, to rise 2.3 percent in 2013 – same as in the previous forecast.

Since the current forecast of current dollar personal income growth in 2013 was unchanged at 5.0 percent, the real personal income forecast in 2013 was also unchanged at 2.6 percent in the current forecast.

Real personal income growth in 2014 is currently forecasted to be 2.9 percent, same as the previous forecast. Civilian unemployment rate is projected to be 4.5 percent in 2014.

The DBEDT Quarterly Statistical and Economic Report contains more than 100 tables of the most recent quarterly data on Hawaii’s economy as well as narrative explanations of the trends in these data. The full report is available at: dbedt.hawaii.gov/economic/data_reports/qser.

ACTUAL AND FORECAST OF KEY ECONOMIC INDICATORS FOR HAWAII: 2011 TO 2016

Economic Indicators 2011 2012 2013 2014 2015 2016
Actual Forecast
Total population (thousands) 1,378 1,392 1,407 1,421 1,436 1,451
Visitor arrivals (thousands) 1 7,299 7,999 8,344 8,554 8,735 8,901
Visitor days (thousands) 1 68,495 74,638 76,957 79,075 80,745 82,282
Visitor expenditures (million dollars) 1 12,255 14,523 15,341 16,070 16,800 17,521
Honolulu CPI-U (1982-84=100) 243.6 249.5 255.2 260.8 266.6 272.4
Personal income (million dollars) 59,014 61,295 64,359 67,706 71,024 74,504
Real personal income (millions of 2000$) 2 42,706 43,316 44,459 45,764 46,973 48,214
Non-agricultural wage & salary jobs (thousands) 594.0 605.3 617.4 628.7 639.4 648.9
Civilian unemployment rate 6.5 5.8 4.8 4.5 4.3 4.1
Gross domestic product (million dollars) 3 66,991 70,315 73,659 76,970 80,433 84,045
Real gross domestic product (millions of 2005$) 3 57,977 59,081 60,499 61,891 63,314 64,765
Gross domestic product deflator (2005=100) 3 115.5 119.0 121.8 124.4 127.0 129.8
Annual Percentage Change
Total population 1.0 1.0 1.0 1.0 1.0 1.0
Visitor arrivals 4.0 9.6 4.3 2.5 2.1 1.9
Visitor days 4.6 9.0 3.1 2.8 2.1 1.9
Visitor expenditures 10.7 18.5 5.6 4.8 4.5 4.3
Honolulu CPI-U 3.7 2.4 2.3 2.2 2.2 2.2
Personal income 5.7 3.9 5.0 5.2 4.9 4.9
Real personal income 1.9 1.4 2.6 2.9 2.6 2.6
Non-agricultural wage & salary jobs 1.2 1.9 2.0 1.8 1.7 1.5
Civilian unemployment rate 4 -0.3 -0.7 -1.0 -0.3 -0.2 -0.3
Gross domestic product 2.1 5.0 4.8 4.5 4.5 4.5
Real gross domestic product -0.2 1.9 2.4 2.3 2.3 2.3
Gross domestic product deflator (2005=100) 2.3 3.0 2.3 2.1 2.2 2.2

1/ Visitors who came to Hawaii by air or by cruise ship.
2/ DBEDT calculated using BEA estimate of nominal personal income deflated by U.S. Bureau of Labor Statistics Honolulu CPI-U.
3/ The 2012 value is estimated by DBEDT.
4/ Absolute change from previous year.
Source: Hawaii State Department of Business, Economic Development & Tourism, May 7, 2013.

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For more information contact:
Dave Young, DBEDT Research and Economic Analysis Division
Phone: (808) 586-2480