Outlook for the Economy

1st Quarter 2023 Report

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Hawaii’s economy has been greatly impacted by the COVID-19 pandemic. However, during 2022, Hawaii welcomed a total of 9.2 million visitors, representing an 89.4 percent recovery from 2019. U.S. visitor arrivals by air were 12.9 percent higher than those who came during 2019. International visitors arriving by air recovered 30.3 percent. Through 2022 and measured in current prices, total visitor spending was $19.3 billion, or 8.9 percent higher than the spending during 2019.

Visitor arrivals by air to the State during the fourth quarter of 2022 totaled 2,309,637 an increase of 20.4 percent from the same quarter in 2021. The average daily visitor census increased 16.1 percent in the fourth quarter of 2022.

The value of private building permits showed an increase of 95.6 percent or $632.3 million during the fourth quarter of 2022 compared with the same quarter of the previous year. The value for the residential permits increased by $374.4 million or 111.3 percent from the same period in the previous year; followed by the additions & alterations category, which increased by $245.2 million or 100.1 percent, and the value of commercial & industrial building permits, which increased by $10.8 million or 13.8 percent during the same period. In the fourth quarter of 2022, government contracts awarded decreased $3,368.0 million or 86.6 percent compared with the same quarter of the previous year.

At the national level, U.S. real GDP growth began gradually decreasing from the first quarter of 2022, with 3.7 percent growth over the same quarter of the previous year. This was followed by 1.8 percent growth in the second quarter of 2022, 1.9 percent in the third quarter of 2022, and 0.9 percent in the fourth quarter of 2022 as compared to the same quarters of the previous year. The Blue Chip Economic Indicators report from February 10, 2023, which is the consensus of 50 economic forecasting organizations, projected that the U.S. economic growth rate for 2023 will increase by 0.7 percent. The report projected a positive 1.2 percent U.S. economic growth for 2024. For Hawaii, DBEDT estimates that Hawaii’s real gross domestic product (GDP) will increase by 1.7 percent in 2023. The forecast then projects 2.1 percent growth in 2024, 1.9 percent in 2025, and 1.8 percent in 2026.

Hawaii will welcome an estimated 9.8 million visitors in 2023, an increase of 6.0 percent from the 2022 level. Visitor arrivals are projected to increase to 10.1 million in 2024, 10.4 million in 2025, and 10.5 million in 2026. Visitor spending is estimated to increase 7.8 percent in 2023. The forecast then projects an increase of 4.6 percent in 2024, 3.8 percent in 2025, and 3.3 percent in 2026.

Non-agriculture payroll jobs are estimated to increase 3.7 percent in 2023. The forecast projects an increase of 2.1 percent in 2024, 1.9 percent in 2025, and 1.4 percent in 2026.

Overall for 2023, the average annual unemployment rate is estimated to be 3.2 percent. The forecast projects a decrease to 2.9 percent in 2024, 2.7 percent in 2025, and 2.6 percent in 2026. These rates are still higher than Hawaii’s average unemployment rate of 2.5 percent from 2017 to 2019.

Nominal personal income is estimated to increase by 3.0 percent in 2023. The forecast then projects an increase of 3.1 percent in 2024, 2.9 percent in 2025 and 3.0 percent in 2026.

Hawaii’s consumer inflation rate, as measured by the Honolulu Consumer Price Index for All Urban Consumers, is estimated to increase 3.1 percent in 2023. The forecast then projects an increase 2.4 percent in 2024, 2.2 percent in 2025, and 2.1 percent in 2026.

Hawaii’s population is expected to remain the same in 2023, and increase 0.1 percent in 2024, 2025, and 2026.

ACTUAL AND FORECAST OF KEY ECONOMIC INDICATORS FOR HAWAII: 2022 TO 2026
Economic Indicators 2021 2022 ¹ 2023 2024 2025 2026
Actual Forecast
Total population (thousands) ² 1,447 1,440 1,440 1,441 1,443 1,445
Visitor arrivals (thousands) ³ 6,778 9,248 9,799 10,130 10,369 10,530
Visitor days (thousands) ³ 65,312 85,265 88,697 90,528 92,037 93,130
Visitor expenditures (million dollars) ³ 13,154 19,315 20,825 21,791 22,623 23,364
Honolulu CPI-U (1982-84=100) 296.8 316.1 326.0 333.7 341.0 348.1
Personal income (million dollars) 87,858 87,206 89,822 92,607 95,293 98,151
Real personal income (millions of 2012$) 67,312 64,272 64,917 65,768 66,457 67,290
Personal income deflator (2012=100) 130.5 135.7 138.4 140.8 143.4 145.9
Non-agricultural wage & salary jobs (thousands) 583.5 609.9 632.5 645.7 658.0 667.2
Civilian unemployment rate 6.0 3.5 3.2 2.9 2.7 2.6
Gross domestic product (million dollars) 91,096 97,745 102,060 106,269 110,203 114,107
Real gross domestic product (millions of 2012$) 74,547 75,846 77,135 78,755 80,251 81,696
Gross domestic product deflator (2012=100) 122.2 128.9 132.3 134.9 137.3 139.7
Annual Percentage Change
Total population -0.3 -0.5 0.0 0.1 0.1 0.1
Visitor arrivals 150.3 36.4 6.0 3.4 2.4 1.6
Visitor days 127.9 30.6 4.0 2.1 1.7 1.2
Visitor expenditures 154.8 46.8 7.8 4.6 3.8 3.3
Honolulu CPI-U 3.8 6.5 3.1 2.4 2.2 2.1
Personal income 5.7 -0.7 3.0 3.1 2.9 3.0
Real personal income 1.1 -4.5 1.0 1.3 1.0 1.3
Personal income deflator (2012=100) 4.5 4.0 2.0 2.2 2.0 1.9
Non-agricultural wage & salary jobs 4.2 4.5 3.7 2.1 1.9 1.4
Civilian unemployment rate 4 -5.7 -2.5 -0.3 -0.3 -0.2 -0.1
Gross domestic product 10.4 7.3 4.4 4.1 3.7 3.5
Real gross domestic product 6.3 1.7 1.7 2.1 1.9 1.8
Gross domestic product deflator (2012=100) 3.8 5.5 2.7 2.0 1.8 1.7
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 and by cruise ship. Expenditures includes supplementary business expenditures.
4/  Absolute change from previous year.
Source:  Hawaii State Department of Business, Economic Development & Tourism, March 2, 2023.