Outlook for the Economy

2nd Quarter 2022 Report

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Hawaii’s economy has been greatly impacted by the COVID-19 pandemic. During the April 2020-March 2022 period, the average unemployment rate (not seasonally adjusted) was 9.2 percent. Hawaii lost 61,600 non-agriculture payroll jobs between the first quarter of 2020 and the first quarter of 2022. However, the impacts of COVID-19 have decreased over time. From the second quarter of 2020 to the first quarter of 2022, the payroll job loss from the first quarter of 2020 decreased from 145,100 jobs to 61,600 jobs.

Hawaii’s unemployment rate increased from 2.0 percent in the first quarter of 2020 to 20.1 percent in the second quarter of 2020. After this peak, the rate declined to 15.2 percent in the third quarter of 2020, 11.2 percent in the fourth quarter of 2020, 6.8 percent in the first quarter of 2021, 6.0 percent in the second quarter of 2021, 5.5 percent in the third quarter of 2021, 4.7 percent in the fourth quarter of 2021, and then 3.8 percent in the first quarter of 2022.

Visitor arrivals to the State during the first quarter of 2022 totaled 1,976,585 an increase of 1,129,541 percent from the same quarter in 2021. The average daily visitor census increased 98.9 percent in the first quarter of 2022.

The value of private building permits showed an increase of 8.2 percent or $65.5 million during the first quarter of 2022. The value for the residential permits increased by $174.9 million or 57.3 percent higher than the same period in the previous year. The larger decrease occurred in the additions & alterations category, which was down by $91.5 million or 24.1 percent while the value of commercial & industrial building permits declined by $17.9 million or 15.3 percent during the same period. In the first quarter of 2022, state government spending on capital investment projects (CIP) increased by 20.8 percent or $54.1 million.

At the national level, U.S. real GDP growth began to gradually improve from the first quarter of 2021, with 0.5 percent growth over the same quarter of the previous year. This was followed by 12.2 percent growth in the second quarter of 2021, 4.9 percent in the third quarter of 2021, 5.5 percent in the fourth quarter of 2021, and 3.5 percent in the first quarter of 2022 as compared to the same quarters of the previous respective years. The Blue Chip Economic Indicators report from May 10, 2022, which is the consensus of 50 economic forecasting organizations, projected that the U.S. economic growth rate for 2022 will increase by 2.6 percent. The report projected a positive 2.1 percent U.S. economic growth for 2023. For Hawaii, DBEDT estimates that Hawaii’s real gross domestic product (GDP) will increase by 3.2 percent in 2022. The forecast then projects 2.5 percent growth in 2023, 2.2 percent in 2024, and 2.0 percent in 2025.

Hawaii will welcome an estimated 9.13 million visitors in 2022, an increase of 34.7 percent from the 2021 level. Visitor arrivals are projected to increase to 9.72 million in 2023, 10.10 million in 2024, and 10.33 million in 2025. Visitor spending is estimated to increase 36.7 percent in 2022. The forecast then projects an increase of 7.1 percent in 2023, 4.9 percent in 2024, and 3.0 percent in 2025.

Non-agriculture payroll jobs are estimated to increase 4.5 percent in 2022. The forecast projects an increase of 3.2 percent in 2023, 2.6 percent in 2024, and 2.1 percent in 2025.

Overall for 2022, the average annual unemployment rate is estimated to be 3.7 percent. The forecast projects a decrease to 3.5 percent in 2023, 3.1 percent in 2024, and 2.9 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 estimated to decrease by 0.9 percent in 2022. The forecast then projects an increase of 3.1 percent in 2023, 3.0 percent in 2024 and 2.9 percent in 2025.

Hawaii’s consumer inflation rate, as measured by the Honolulu Consumer Price Index, for All Urban Consumers, is estimated to increase 6.0 percent in 2022. The forecast then projects an increase 2.8 percent in 2023, 2.3 percent in 2024, and 2.1 percent in 2025.

Hawaii’s population is expected to decrease 0.1 percent in 2022, increase 0.1 percent in 2023, increase 0.2 percent in 2024 and 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 1,441 1,442 1,445 1,448
Visitor arrivals (thousands) ³ 2,708 6,777 9,129 9,723 10,096 10,329
Visitor days (thousands) ³ 28,660 65,343 82,218 86,249 88,911 90,361
Visitor expenditures (million dollars) ³ 5,162 12,996 17,763 19,029 19,953 20,553
Honolulu CPI-U (1982-84=100) 286.0 296.8 314.6 323.5 331.0 337.9
Personal income (million dollars) 82,527 87,054 86,230 88,911 91,577 94,202
Real personal income (millions of 2012$) 66,459 68,171 64,728 65,239 65,945 66,685
Personal income deflator (2012=100) 124.2 127.7 133.2 136.3 138.9 141.3
Non-agricultural wage & salary jobs (thousands) 559.9 583.5 609.8 629.3 645.6 659.2
Civilian unemployment rate 12.0 5.7 3.7 3.5 3.1 2.9
Gross domestic product (million dollars) 82,885 90,059 97,402 102,333 106,363 110,117
Real gross domestic product (millions of 2012$) 70,625 73,880 76,244 78,150 79,869 81,466
Gross domestic product deflator (2012=100) 117.4 121.9 127.8 130.9 133.2 135.2
Annual Percentage Change
Total population (NA) -0.7 -0.1 0.1 0.2 0.2
Visitor arrivals -73.9 150.3 34.7 6.5 3.8 2.3
Visitor days -68.3 128.0 25.8 4.9 3.1 1.6
Visitor expenditures -71.1 151.8 36.7 7.1 4.9 3.0
Honolulu CPI-U 1.6 3.8 6.0 2.8 2.3 2.1
Personal income 5.1 5.5 -0.9 3.1 3.0 2.9
Real personal income 3.4 2.6 -5.1 0.8 1.1 1.1
Personal income deflator (2012=100) 1.7 2.8 4.3 2.3 1.9 1.7
Non-agricultural wage & salary jobs -15.4 4.2 4.5 3.2 2.6 2.1
Civilian unemployment rate 4 9.1 -6.3 -2.0 -0.2 -0.3 -0.2
Gross domestic product -9.7 8.7 8.2 5.1 3.9 3.5
Real gross domestic product -10.8 4.6 3.2 2.5 2.2 2.0
Gross domestic product deflator (2012=100) 1.1 3.9 4.8 2.5 1.7 1.5
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, May 24, 2022.