State Remains Optimistic on Economic Growth

Posted on Aug 21, 2014 in News

For Immediate Release: August 20, 2014
DBEDT News Release 14-06

HONOLULU—In its third quarter 2014 statistics and economic report, the Department of Business, Economic Development and Tourism (DBEDT) revised Hawaii economic growth upward due primarily to the prevailing low inflation rate.

“Hawaii’s inflation rate, of 1.1 percent, was lower than the U.S. average for the first time since 2003,” said DBEDT Director Richard C. Lim. “At the same time, our labor market continues to improve; we are seeing record-high labor force and workers employed during the first seven months of this year.”

Also, the state’s unemployment rate remains one of the lowest in the nation.

Though economic indicators continue to be mixed during the first half of 2014, DBEDT economists see signs of improvement during the second half of the year. Visitor arrivals during the first half of 2014 were down by 0.5 of a percentage point, but the number of scheduled air seats (an indicator of the supply side of tourism) is expected to increase by more than 5.0 percent during the second of half of 2014.

Increased air seats motivates a prediction that visitor arrivals hit a new record this year, with 8.2 million visitors and $14.9 billion in spending.

Though landfall of Tropical Storm Iselle and the threat of Julio resulted in 13,500 visitor reductions for the two days of Aug. 7 and 8, visitor counts are quickly recovering.

Through July this year, non-agricultural payroll jobs increased by nearly 7,000 as compared with the same period last year, with many industries adding jobs.

Despite a net loss of 100 jobs in the construction sector, the value of total private building permits increased by 7.0 percent so far through July 2014, indicating more construction activity in coming months.

Hawaii’s inflation rate is expected to remain low for the next few years. DBEDT expects that the consumer inflation rate will be 1.5 percent in 2014, 2.2 percent in 2015, and gradually increase to 3.0 percent by 2017.

The unemployment rate for the first seven months of 2014 was 4.5 percent. DBEDT analysts predict the unemployment rate will drop to 4.4 percent for 2014, 4.1 percent in 2015, and slip below 4.0 percent thereafter.

Hawaii real personal income growth is projected to grow at 2.6 percent in 2014, higher than the 2.1 percent projected in the previous forecast. For 2015, the new projection is 2.5 percent, also higher than the 2.2 percent projected last quarter.

Real Gross Domestic Product (GDP), the value of goods and services produced measured by constant 2009 dollars, is now expected to grow by 2.6 percent for 2014, higher than the 2.4 percent projected last quarter. Real GDP growth in 2013 was 1.9 percent and the past 10-year average growth rate was 2.0 percent.

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/qser

ACTUAL AND FORECAST OF KEY ECONOMIC INDICATORS FOR HAWAII: 2012 TO 2017
Economic Indicators 2012 2013 2014 2015 2016 2017
Actual Forecast
Total population (thousands) 1,390 1,404 1,418 1,432 1,447 1,461
Visitor arrivals (thousands) ¹ 8,029 8,174 8,231 8,391 8,548 8,706
Visitor days (thousands) ¹ 74,519 74,942 75,515 77,223 78,646 80,077
Visitor expenditures (million dollars) ¹ 14,365 14,521 14,898 15,430 16,133 16,805
Honolulu CPI-U (1982-84=100) 249.5 253.9 257.7 263.4 270.5 279.2
Personal income (million dollars) 62,330 64,139 66,705 69,707 73,052 76,705
Real personal income (millions of 2008$) ² 50,245 50,794 52,137 53,430 54,661 55,772
Non-agricultural wage & salary jobs (thousands) 606.3 617.6 625.0 634.4 643.3 651.6
Civilian unemployment rate 5.8 4.7 4.4 4.1 3.8 3.5
Gross domestic product (million dollars) ³ 72,512 75,235 78,512 81,885 85,569 89,332
Real gross domestic product (millions of 2009$) ³ 68,825 70,110 71,941 73,524 75,215 76,870
Gross domestic product deflator (2009=100) ³ 105.4 107.3 109.1 111.4 113.8 116.2
Annual Percentage Change
Total population 1.0 1.0 1.0 1.0 1.0 1.0
Visitor arrivals ¹ 10.0 1.8 0.7 2.0 1.9 1.8
Visitor days ¹ 8.8 0.6 0.8 2.3 1.8 1.8
Visitor expenditures ¹ 17.9 1.1 2.6 3.6 4.6 4.2
Honolulu CPI-U 2.4 1.8 1.5 2.2 2.7 3.2
Personal income 3.7 2.9 4.0 4.5 4.8 5.0
Real personal income ² 1.4 1.1 2.6 2.5 2.3 2.0
Non-agricultural wage & salary jobs 2.2 1.9 1.2 1.5 1.4 1.3
Civilian unemployment rate -0.7 -1.1 -0.3 -0.3 -0.3 -0.3
Gross domestic product ³ 4.0 3.8 4.4 4.3 4.5 4.4
Real gross domestic product ³ 1.7 1.9 2.6 2.2 2.3 2.2
Gross domestic product deflator (2009=100) ³ 2.2 1.9 1.7 2.1 2.2 2.2

1/ Visitors who came to Hawaii by air or by cruise ship.
2/ Using personal income deflator developed by the U.S. Bureau of Economic Analysis.
3/ 2014 and later years are estimated by DBEDT, data for earlier years from U.S. Bureau of Economic Analysis.
Source: Hawaii State Department of Business, Economic Development & Tourism, August 20, 2014.

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