Outlook for the Economy

3rd Quarter 2021 Report

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Hawaii’s economy has been greatly impacted by the COVID-19 pandemic. During the April 2020-June 2021 period, the average unemployment rate (not seasonally adjusted) was 12.4 percent. Hawaii lost 92,600 non-agriculture payroll jobs between the first quarter of 2020 and the second quarter of 2021. All industry sectors lost jobs except for construction jobs. The accommodation and food services & drinking places accounted for 34.0 percent of the total job losses, with a decline of 31,500 jobs. Overall, statewide non-agriculture payroll jobs decreased by 14.0 percent during the April 2020-June 2021 period.

Hawaii’s unemployment rate increased from 2.0 percent in the first quarter of 2020 to 19.4 percent in the second quarter of 2020. After this peak, the rate declined to 14.5 percent in the third quarter of 2020, 11.2 percent in the fourth quarter of 2020, 9.1 percent in the first quarter of 2021, and then 7.8 percent in the second quarter of 2021.

Visitor arrivals to the State during the second quarter of 2021 totaled 1,904,805, an increase of 6,094.9 percent from the same quarter in 2020. The average daily visitor census increased 2,062.7 percent in the second quarter of 2021.

The value of private building permits showed an increase of 94.2 percent or $652.7 million during the second quarter of 2021. The largest increase occurred in the residential category, which was up by $507.5 million or 163.4 percent. The value of commercial & industrial building permits declined by 23.9 percent, and the value for additions & alterations permits increased by 71.2 percent during the same period. In the second quarter of 2021, the state government spending on capital investment projects (CIP) decreased by 6.2 percent or $29.1 million.

At the national level, U.S. real GDP growth fell to a negative 9.1 percent in the second quarter of 2020, following a 0.6 percent increase in the first quarter. Growth then began to gradually improve with negative 2.9 percent growth in the third quarter, negative 2.3 percent in the fourth quarter, positive 0.5 percent growth in the first quarter of 2021, and positive 12.2 percent in the second quarter of 2021 as compared to the same quarter in previous year. The Blue Chip Economic Indicators report from August 10, 2021, which is the consensus of 50 economic forecasting organizations, projected that the U.S. economic growth rate for 2021 will increase by 6.2 percent. The report projected a positive 4.4 percent U.S. economic growth for 2022. The Blue Chip forecasts for foreign countries were all positive for 2021. Based on the above, DBEDT projects that Hawaii’s real gross domestic product (GDP), will increase by 2.7 percent in 2021, 2.8 percent in 2022, 2.1 percent in 2023, and 2.0 percent in 2024.

Hawaii will welcome 6.8 million visitors in 2021, an increase of 150.0 percent from the 2020 level. Visitor arrivals will increase to 8.8 million in 2022, 9.6 million in 2023, and 10.2 million in 2024. Visitor spending will increase 132.9 percent in 2021, then will increase 27.1 percent in 2022, 10.4 percent in 2023, and 6.8 percent in 2024.

Non-agriculture payroll jobs will increase 4.9 percent in 2021, then will increase by 6.4 percent in 2022, 1.9 percent in 2023, and 1.3 percent in 2024.

Overall for 2021, the average annual unemployment rate is forecast to be 7.6 percent, then decrease to 6.4 percent in 2022, 5.4 percent in 2023, and 4.7 percent in 2024. These rates are much higher than Hawaii’s average unemployment rate of 2.5 percent from 2017 to 2019.

Nominal personal income is forecast to increase by 0.9 percent in 2021 and decrease 3.5 percent in 2022, It is then expected to increase 3.0 percent in 2023 and 3.2 percent in 2024.

Hawaii’s consumer inflation rate, as measured by the Honolulu Consumer Price Index for All Urban Consumers, is expected to increase 3.1 percent in 2021, increase 2.3 percent in 2022, and increase 2.0 percent per year in 2023 and 2024.

Hawaii’s population is expected to increase 0.1 percent in 2021 and 2022, increase 0.3 percent in 2023, and increase 0.2 percent in 2024.

ACTUAL AND FORECAST OF KEY ECONOMIC INDICATORS FOR HAWAII: 2019 TO 2024
Economic Indicators 2019 2020 2021 2022 2023 2024
Total population (thousands) ¹ (NA) 1,455 1,457 1,459 1,463 1,466
Visitor arrivals (thousands) ² 10,387 2,708 6,769 8,785 9,610 10,169
Visitor days (thousands) ² 90,361 28,696 63,629 78,889 85,382 89,430
Visitor expenditures (million dollars) ² 17,844 5,248 12,223 15,533 17,148 18,320
Honolulu CPI-U (1982-84=100) 281.6 286.0 294.8 301.5 307.6 313.7
Personal income (million dollars) 80,727 86,273 87,057 84,048 86,528 89,276
Real personal income (millions of 2012$) ³ 61,855 65,210 64,073 62,496 63,077 63,819
Non-agricultural wage & salary jobs (thousands) 658.5 557.1 584.2 621.4 633.3 641.6
Civilian unemployment rate 2.5 11.6 7.6 6.4 5.4 4.7
Gross domestic product (million dollars) 95,744 89,856 95,118 99,468 103,558 106,941
Real gross domestic product (millions of 2012$) 82,471 75,863 77,900 80,059 81,744 83,373
Gross domestic product deflator (2012=100) 116.1 118.4 121.5 124.3 126.7 128.3
Annual Percentage Change
Total population (NA) (NA) 0.1 0.1 0.3 0.2
Visitor arrivals 5.0 -73.9 150.0 29.8 9.4 5.8
Visitor days 2.4 -68.2 121.7 24.0 8.2 4.7
Visitor expenditures 1.1 -70.6 132.9 27.1 10.4 6.8
Honolulu CPI-U 1.6 1.6 3.1 2.3 2.0 2.0
Personal income 2.9 6.9 0.9 -3.5 3.0 3.2
Real personal income 0.7 5.4 -1.7 -2.5 0.9 1.2
Non-agricultural wage & salary jobs 0.0 -15.4 4.9 6.4 1.9 1.3
Civilian unemployment rate 4 0.1 9.1 -4.0 -1.2 -0.9 -0.7
Gross domestic product 2.8 -6.1 5.9 4.6 4.1 3.3
Real gross domestic product 0.3 -8.0 2.7 2.8 2.1 2.0
Gross domestic product deflator (2012=100) 2.5 2.0 2.6 2.3 2.0 1.3
NA Not available or not applicable.
1/ Census of Population April 1, 2020 count.
2/ Visitors who came to Hawaii by air or by cruise ship. Expenditures includes supplementary business expenditures.
3/ Using personal income deflator developed by the U.S. Bureau of Economic Analysis and estimated by DBEDT.
4/ Absolute change from previous year.
Source: Hawaii State Department of Business, Economic Development & Tourism, August 26, 2021.