Outlook for the Economy

1st Quarter 2022 Report

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Hawaii’s economy has been greatly impacted by the COVID-19 pandemic. During the April 2020-December 2021 period, the average unemployment rate (not seasonally adjusted) was 10.6 percent. Hawaii lost 77,300 non-agriculture payroll jobs between the first quarter of 2020 and the fourth quarter of 2021. However, the impacts of COVID-19 were decreasing over time. From the second quarter of 2020 to the fourth quarter of 2021, the payroll job loss from the first quarter of 2020 decreased from 144,900 jobs to 77,300 jobs. All industry sectors lost jobs except for construction jobs. The accommodation and food services & drinking places accounted for 32.3 percent of the total job losses, with a decline of 25,000 jobs.

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, 7.8 percent in the second quarter of 2021, 6.6 percent in the third quarter of 2021, and then 5.4 percent in the fourth quarter of 2021.

Visitor arrivals to the State during the fourth quarter of 2021 totaled 1,917,843, an increase of 285.8 percent from the same quarter in 2020. The average daily visitor census increased 187.2 percent in the fourth quarter of 2021.

The value of private building permits showed a decrease of 16.0 percent or $126.2 million during the fourth quarter of 2021. The largest decrease occurred in the additions & alterations category, which was down by $139.3 million or 36.3 percent. The value of commercial & industrial building permits declined by 17.4 percent, and the value for the residential permits increased by 9.6 percent during the same period. In the fourth quarter of 2021, state government spending on capital investment projects (CIP) increased by 7.2 percent or $43.1 million.

At the national level, U.S. real GDP growth began to gradually improve with 0.5 percent growth in the first quarter of 2021, 12.2 percent in the second quarter of 2021, 4.9 percent in the third quarter of 2021, and 5.6 percent in the fourth quarter of 2021 as compared to the same quarter in previous year. The Blue Chip Economic Indicators report from February 10, 2022, which is the consensus of 50 economic forecasting organizations, projected that the U.S. economic growth rate for 2022 will increase by 3.7 percent. The report projected a positive 2.6 percent U.S. economic growth for 2023. The Blue Chip forecasts for foreign countries were all positive for 2022. Based on the above, DBEDT projects that Hawaii’s real gross domestic product (GDP), will increase by 3.2 percent in 2022, 2.5 percent in 2023, 2.3 percent in 2024, and 2.0 percent in 2025.

Hawaii will welcome 8.97 million visitors in 2022, an increase of 32.3 percent from the 2021 level. Visitor arrivals will increase to 9.67 million in 2023, 10.08 million in 2024, and 10.39 million in 2025. Visitor spending will increase 28.8 percent in 2022, then will increase 7.9 percent in 2023, 4.9 percent in 2024, and 3.5 percent in 2025.

Non-agriculture payroll jobs will increase 4.8 percent in 2022, then will increase by 3.2 percent in 2023, 2.6 percent in 2024, and 2.2 percent in 2025.

Overall for 2022, the average annual unemployment rate is forecast to be 4.0 percent, then decrease to 3.5 percent in 2023, 3.2 percent in 2024, and 2.8 percent in 2025. These rates are still higher than Hawaii’s average unemployment rate of 2.5 percent from 2017 to 2019.

Nominal personal income is forecast to decrease by 1.7 percent in 2021 and increase 3.5 percent in 2023. It is then expected to increase 3.1 percent in 2024 and 3.1 percent in 2025.

Hawaii’s consumer inflation rate, as measured by the Honolulu Consumer Price Index for All Urban Consumers, is expected to increase 4.8 percent in 2022, increase 2.6 percent in 2023, increase 2.3 percent in 2024, and increase 2.1 percent in 2025.

Hawaii’s population is expected to increase 0.1 percent in 2022, increase 0.2 percent in 2023, increase 0.3 percent in 2024, and increase 0.3 percent in 2025.

ACTUAL AND FORECAST OF KEY ECONOMIC INDICATORS FOR HAWAII: 2020 TO 2025
Economic Indicators 2020 2021 ¹ 2022 2023 2024 2025
Actual Forecast
Total population (thousands) ² 1,452 1,442 1,443 1,446 1,450 1,454
Visitor arrivals (thousands) ³ 2,708 6,777 8,969 9,667 10,079 10,394
Visitor days (thousands) ³ 28,660 65,343 81,166 85,972 88,650 90,266
Visitor expenditures (million dollars) ³ 5,162 12,996 16,743 18,071 18,953 19,620
Honolulu CPI-U (1982-84=100) 286.0 296.8 311.1 319.2 326.5 333.3
Personal income (million dollars) 82,527 86,617 85,137 88,107 90,828 93,630
Real personal income (millions of 2012$) 66,459 67,824 64,959 65,785 66,549 67,438
Personal income deflator (2012=100) 124.2 127.7 131.1 133.9 136.5 138.8
Non-agricultural wage & salary jobs (thousands) 557.1 568.2 595.5 614.8 631.1 645.1
Civilian unemployment rate 11.6 7.2 4.0 3.5 3.2 2.8
Gross domestic product (million dollars) 82,885 88,185 93,009 97,241 100,970 104,328
Real gross domestic product (millions of 2012$) 70,625 73,309 75,655 77,546 79,330 80,916
Gross domestic product deflator (2012=100) 117.4 120.3 122.9 125.4 127.3 128.9
Annual Percentage Change
Total population (NA) -0.7 0.1 0.2 0.3 0.3
Visitor arrivals -73.9 150.3 32.3 7.8 4.3 3.1
Visitor days -68.3 128.0 24.2 5.9 3.1 1.8
Visitor expenditures -71.1 151.8 28.8 7.9 4.9 3.5
Honolulu CPI-U 1.6 3.8 4.8 2.6 2.3 2.1
Personal income 5.1 5.0 -1.7 3.5 3.1 3.1
Real personal income 3.4 2.1 -4.2 1.3 1.2 1.3
Personal income deflator 1.7 2.8 2.6 2.2 1.9 1.7
Non-agricultural wage & salary jobs -15.4 2.0 4.8 3.2 2.6 2.2
Civilian unemployment rate 4 9.1 -4.4 -3.2 -0.5 -0.3 -0.4
Gross domestic product -9.7 6.4 5.5 4.6 3.8 3.3
Real gross domestic product -10.8 3.8 3.2 2.5 2.3 2.0
Gross domestic product deflator 1.1 2.5 2.2 2.0 1.5 1.3
NA Not available or not applicable.
1/ Some of the indicators are preliminary or estimated such as visitor expenditures, personal income, and gross domestic product.
2/ July 1 count.
3/ Visitors who came to Hawaii by air or by cruise ship. Expenditures includes supplementary business expenditures.
4/ Absolute change from previous year.
Source: Hawaii State Department of Business, Economic Development & Tourism, February 28, 2022.