State Forecasts Strong Economic Growth

Posted on Feb 22, 2013 in News

For Immediate Release: February 22, 2013
DBEDT News Release 13-01

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

“We are encouraged by the continued expansion in our visitor industry and the recovery in the construction and real estate sectors,” said DBEDT Director Richard C. Lim. “This positive forecast is particularly striking, given our decision to be somewhat conservative relative to other forecast models, taking into consideration several unknown variables down the road, like the impact of potential federal budget cuts.”

Despite its conservative model, DBEDT believes the state’s economic recovery will continue – based on a stronger visitor industry performance and growth of other non-tourism sectors such as financial activities, professional services and health services.

Following higher than expected growth in 2012 visitor arrivals, DBEDT projects that overall 2013 visitor arrivals will increase by 5.4 percent, and that total visitor spending will increase by 7.1 percent.

The consensus forecast by the top 50 economic forecasting agencies projects a 1.9 percent economic growth rate for the United States for 2013. Forecasts for Japanese real GDP growth in 2013 were less optimistic, at 0.9 percent in the most recent economic forecast.

For the local economy, DBEDT increased the forecasted growth rates of most of the economic indicators such as real personal income, GDP, and jobs, compared to its forecast in November 2012.

The number of non-agricultural wage and salary jobs in Hawaii is expected to increase 2.2 percent in 2013. Non-agricultural wage and salary jobs increased 1.6 percent in 2012. As with the national economy, job growth has lagged other economic indicators in Hawaii.

For other major economic indicators, the current forecasts are mostly more optimistic compared with the previous forecasts. The forecast for 2013 real gross domestic product for Hawaii is 2.6 percent growth. The current forecast of current dollar personal income growth in 2013 is 5.0 percent. The real personal income forecast in 2013 is 2.5 percent growth.

DBEDT expects the Honolulu Consumer Price Index (CPI), a proxy for inflation, to rise 2.4 percent in 2013 – the same as in the previous forecast.

Forecasts for 2014 are also mostly more optimistic compared with the previous forecasts. Non-agricultural wage and salary job count is currently expected to increase by 1.8 percent. The number of visitor arrivals is projected to grow by 2.5 percent, and visitor expenditures will increase by 5 percent.

Real GDP growth in 2014 is forecast to grow 2.5 percent, the same as the previous forecast. Real personal income growth in 2014 is forecast to be 2.8 percent, also the same as the previous forecast.

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: hawaii.gov/dbedt/info/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 8,431 8,643 8,818 8,978
Visitor days (thousands) ¹ 68,495 74,638 78,600 80,557 82,181 83,677
Visitor expenditures (million dollars) ¹ 12,255 14,523 15,555 16,340 17,074 17,799
Honolulu CPI-U (1982-84=100) 243.6 249.5 255.2 260.8 266.6 272.4
Personal income (million dollars) ² 59,014 61,552 64,629 67,990 71,389 74,959
Real personal income (millions of 2000$) ³ 42,706 43,498 44,646 45,956 47,215 48,509
Non-agricultural wage & salary jobs (thousands) 592.1 601.3 614.5 625.6 636.1 645.5
Gross domestic product (million dollars) 4 66,991 70,105 73,582 77,040 80,506 84,046
Real gross domestic product (millions of 2005$) 4 57,977 58,905 60,436 61,947 63,372 64,766
Gross domestic product deflator (2005=100) 4 115.5 119.0 121.8 124.4 127.0 129.8
Annual Percentage Change
Total population 1.0 1.0 1.0 1.0 1.0 1.0
Visitor arrivals ¹ 4.0 9.6 5.4 2.5 2.0 1.8
Visitor days ¹ 4.6 9.0 5.3 2.5 2.0 1.8
Visitor expenditures ¹ 10.7 18.5 7.1 5.0 4.5 4.2
Honolulu CPI-U 3.7 2.4 2.3 2.2 2.2 2.2
Personal income ² 5.7 4.3 5.0 5.2 5.0 5.0
Real personal income ³ 1.9 1.9 2.6 2.9 2.7 2.7
Non-agricultural wage & salary jobs 0.9 1.6 2.2 1.8 1.7 1.5
Gross domestic product 4 2.1 4.6 5.0 4.7 4.5 4.4
Real gross domestic product 4 -0.2 1.6 2.6 2.5 2.3 2.2
Gross domestic product deflator (2005=100) 4 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/ The 2012 values are estimated based on actual values in the first three quarters of 2012.
3/ DBEDT calculated using BEA estimate of nominal personal income deflated by U.S. Bureau of Labor Statistics Honolulu CPI-U.
4/ The 2011 value is estimated by DBEDT.
Source: Hawaii State Department of Business, Economic Development & Tourism, February 21, 2013.