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.
|Economic Indicators||2021||2022 ¹||2023||2024||2025||2026|
|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|
|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|
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.