Outlook for the Economy
1st Quarter 2020 Report
Hawaii’s economy is expected to continue positive growth in 2020 and 2021. This outlook is based on the most recent developments in the national and global economies, the performance of Hawaii’s tourism industry, labor market conditions, and the growth of personal income and tax revenues.
Hawaii’s economy depends significantly on conditions in the U.S. economy and key international economies, especially Japan. According to the March 2020 Blue Chip Economic Consensus Forecasts, U.S. real GDP is expected to increase by 1.7 percent in 2020, 0.1 of a percentage point below the growth rate projected in the November 2019 forecast. For 2021 the consensus forecast predicts an overall 2.0 percent growth in U.S. real GDP.
According to the March 2020 Blue Chip Economic Consensus Forecast, real GDP growth for Japan is now expected to increase 0.0 percent in 2020, 0.3 of a percentage point below the growth rate projected in the November 2019 forecast. For 2021, the consensus forecast now projects an overall 1.0 percent growth rate for Japanese real GDP.
For Hawaii’s economy, DBEDT expects that visitor expenditures will grow at a lower rate than projected in the previous forecast for 2020, and the real GDP growth rate will also be lower than projected in the previous forecast.
Overall, Hawaii’s economy, as measured by real GDP, is projected to show a 0.5 percent increase in 2020, 0.7 of a percentage point below the growth rate forecast last quarter. The real GDP growth forecast for 2021 is 1.5 percent, 0.2 of a percentage point above the previous forecast.
Hawaii’s unemployment rate is projected to be 3.2 percent in 2020, same as the previous forecast. The unemployment rate in 2021 is projected to be 3.1 percent, 0.3 of a percentage point below the previous forecast.
Visitor arrivals are expected to decrease 3.3 percent in 2020, 5.8 percentage points below the previous forecast. The forecast for visitor days in 2020 decreased 5.7 percentage points to negative 3.7 percent. The 2020 forecast for visitor expenditure growth was decreased 6.3 percentage points to negative 3.8 percent as projected in the previous forecast. For 2021, the growth rate of visitor arrivals, visitor days, and visitor expenditures are now expected to be 4.0 percent, 3.8 percent, and 4.4 percent, respectively.
The projection for the non-agricultural wage and salary job growth rate for 2020 is negative 0.2 percent, 0.5 of a percentage point below the previous forecast. In 2021, jobs are projected to increase 0.5 percent, 0.1 of a percentage point above the previous forecast.
The Honolulu Consumer Price Index (CPI) is expected to increase 1.7 percent in 2020, 0.6 of a percentage point below the previous forecast. In 2021, the CPI is projected to increase 1.8 percent, 0.6 of a percentage point below the previous forecast.
Personal income in current dollars is expected to increase 2.8 percent in 2020, 0.9 of a percentage point below the previous forecast. Real personal income is now projected to grow 1.9 percent in 2020, 0.2 of a percentage point above the previous forecast. In 2021, current-dollar personal income and real personal income are expected to increase 4.0 and 2.0 percent, respectively.
Beyond 2021, the economy is expected to continue its expansion path, with job growth projected to be 0.4 percent in 2022 and 2023. Visitor arrivals are expected to increase 1.8 percent in 2022 and 1.6 percent in 2023. Visitor expenditures are expected to increase 2.1 percent in 2022 and 1.9 percent in 2023. Real personal income is projected to increase 1.9 percent in 2022 and 2023. Hawaii’s real GDP growth is expected to increase 1.3 percent in 2022 and 2023. The unemployment rate is expected to increase to 3.3 percent in 2022 and 3.4 percent in 2023.
|Total population (thousands)||1,421||1,416||1,419||1,422||1,426||1,430|
|Visitor arrivals (thousands) 1/||9,889||10,425||10,081||10,484||10,673||10,844|
|Visitor days (thousands) 1/||88,285||90,892||87,562||90,898||92,321||93,581|
|Visitor expenditures (million dollars) 1/||17,643||17,890||17,211||17,972||18,344||18,689|
|Honolulu CPI-U (1982-84=100)||277.1||281.6||286.4||291.6||297.2||303.0|
|Personal income (million dollars) 2/||78,721||81,513||83,796||87,148||90,372||93,716|
|Real personal income (millions of 2012$) 3/||61,937||63,218||64,427||65,714||66,972||68,241|
|Non-agricultural wage & salary jobs (thousands)||656.6||660.1||658.8||662.1||664.7||667.4|
|Civilian unemployment rate 4/||2.4||2.7||3.2||3.1||3.3||3.4|
|Gross domestic product (million dollars) 5/||93,798||97,456||101,062||104,801||108,679||112,700|
|Real gross domestic product (millions of 2012$) 5/||82,652||83,644||84,062||85,323||86,432||87,556|
|Gross domestic product deflator (2012=100) 5/||113.5||116.5||120.2||122.8||125.7||128.7|
|Annual Percentage Change|
|Visitor arrivals 1/||5.2||5.4||-3.3||4.0||1.8||1.6|
|Visitor days 1/||4.9||3.0||-3.7||3.8||1.6||1.4|
|Visitor expenditures 1/||5.1||1.4||-3.8||4.4||2.1||1.9|
|Personal income 2/||4.0||3.5||2.8||4.0||3.7||3.7|
|Real personal income 3/||2.3||2.1||1.9||2.0||1.9||1.9|
|Non-agricultural wage & salary jobs||0.5||0.5||-0.2||0.5||0.4||0.4|
|Civilian unemployment rate 4/||0.0||0.3||0.5||-0.1||0.2||0.1|
|Gross domestic product 5/||4.9||3.9||3.7||3.7||3.7||3.7|
|Real gross domestic product 5/||2.4||1.2||0.5||1.5||1.3||1.3|
|Gross domestic product deflator (2012=100) 5/||2.4||2.7||3.2||2.2||2.4||2.4|
2019 supplementary expenditure was estimated by DBEDT.
3/ Using personal income deflator developed by the U.S. Bureau of Economic Analysis and estimated by DBEDT.
4/ Absolute change from previous year.
5/ 2019 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, March 11, 2020.