Research & Economic Analysis

4th Quarter 2019 Report

Hawaii’s economy is expected to continue positive growth in 2019 and 2020. 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 November 2019 Blue Chip Economic Consensus Forecasts, U.S. real GDP is expected to increase by 2.3 percent in 2019, 0.1 of a percentage point below the growth rate projected in the August 2019 forecast. For 2020 the consensus forecast predicts an overall 1.8 percent growth in U.S. real GDP.

According to the November 2019 Blue Chip Economic Consensus Forecast, real GDP growth for Japan is now expected to increase 0.9 percent in 2019, 0.2 of a percentage point above the growth rate projected in the August 2019 forecast. For 2020, the consensus forecast now projects an overall 0.3 percent growth rate for Japanese real GDP.

For Hawaii’s economy, DBEDT expects that visitor expenditures will grow at a higher rate than projected in the previous forecast for 2019, and the real GDP growth rate will be slightly higher than projected in the previous forecast.

Overall, Hawaii’s economy, as measured by real GDP, is projected to show a 1.2 percent increase in 2019, 0.1 of a percentage point above the growth rate forecast last quarter. The real GDP growth forecast for 2020 is 1.2 percent, the same as the previous forecast.

Hawaii’s unemployment rate is projected to be 2.8 percent in 2019, 0.2 of a percentage point below that of the previous forecast. The unemployment rate in 2020 is projected to be 3.2 percent, the same as the previous forecast.

Visitor arrivals are expected to increase 5.7 percent in 2019, 2.2 percentage points above the previous forecast. The forecast for visitor days in 2019 also increased 2.2 percentage points to 3.2 percent. The 2019 forecast for visitor expenditure growth was revised upward to 0.9 percent, from a negative 0.2 percent growth projected in the previous forecast. For 2020, the growth rate of visitor arrivals, visitor days, and visitor expenditures are now expected to be 2.5 percent, 2.0 percent, and 2.5 percent, respectively.

The projection for the non-agricultural wage and salary job growth rate for 2019 is 0.4 percent, the same as the previous forecast. In 2020, jobs are projected to increase 0.3 percent, also the same as the previous forecast.

The Honolulu Consumer Price Index (CPI) is expected to increase 2.0 percent in 2019, the same as the previous forecast. In 2020, the CPI is projected to increase 2.3 percent, also same as the previous forecast.

Personal income in current dollars is expected to increase 3.5 percent in 2019, 0.6 of a percentage point above the previous forecast. Real personal income is now projected to grow 1.7 percent in 2019, 0.5 of a percentage point above the previous forecast. In 2020, current-dollar personal income and real personal income are expected to increase 3.7 and 1.7 percent, respectively.

Beyond 2020, the economy is expected to continue its expansion path, with job growth projected to be 0.4 percent in 2021 and 2022. Visitor arrivals are expected to increase 2.1 percent in 2021 and 1.5 percent in 2022. Visitor expenditures are expected to increase 2.1 percent in 2021 and 1.5 percent in 2022. Real personal income is projected to increase 1.6 percent in 2021 and 1.5 percent in 2022. Hawaii’s real GDP growth is expected to increase 1.3 percent in 2021 and 2022. The unemployment rate is expected to increase to 3.4 percent in 2021 and 3.6 percent in 2022.