Outlook for the Economy

3rd Quarter 2022 Report

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Hawaii’s economy has been greatly impacted by the COVID-19 pandemic. However, during the first seven months of 2022, Hawaii welcomed a total of 5.4 million visitors, representing 86.8 percent recovery from the same period in 2019. U.S. visitors were 12.4 percent higher than those who came during the same period in 2019. International visitors recovered 33.8 percent with Canadian visitors leading the recovery at 63.3 percent, Japanese visitors at 6.7 percent, and other international visitors at 52.4 percent. Through July 2022 and measured in current prices, visitor spending totaled $11.2 billion, representing 5.8 percent higher than the spending made during the same period in 2019.

Visitor arrivals to the State during the second quarter of 2022 totaled 2,425,566 an increase of 27.3 percent from the same quarter in 2021. The average daily visitor census increased 20.7 percent in the second quarter of 2022.

The value of private building permits showed a decrease of 52.8 percent or $711.0 million during the second quarter of 2022 compared with the same quarter of the previous year. The value for the residential permits decreased by $536.8 million or 65.6 percent from the same period in the previous year; followed by the additions & alterations category, which was down by $156.4 million or 36.7 percent while the value of commercial & industrial building permits declined by $17.7 million or 17.4 percent during the same period. In the second quarter of 2022, government contracts awarded increased $3,974.3 million or 1,544.9 percent compared with the same quarter of the previous year.

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, 3.5 percent in the first quarter of 2022, and 1.7 percent in the second quarter of 2022 as compared to the same quarters of the previous respective years. The Blue Chip Economic Indicators report from August 10, 2022, which is the consensus of 50 economic forecasting organizations, projected that the U.S. economic growth rate for 2022 will increase by 1.5 percent. The report projected a positive 0.7 percent U.S. economic growth for 2023. For Hawaii, DBEDT estimates that Hawaii’s real gross domestic product (GDP) will increase by 2.6 percent in 2022. The forecast then projects 1.7 percent growth in 2023, 2.1 percent in 2024, and 2.0 percent in 2025.

Hawaii will welcome an estimated 9.2 million visitors in 2022, an increase of 35.6 percent from the 2021 level. Visitor arrivals are projected to increase to 9.8 million in 2023, 10.2 million in 2024, and 10.55 million in 2025. Visitor spending is estimated to increase 45.2 percent in 2022. The forecast then projects an increase of 9.2 percent in 2023, 5.1 percent in 2024, and 4.9 percent in 2025.

Non-agriculture payroll jobs are estimated to increase 4.2 percent in 2022. The forecast projects an increase of 3.2 percent in 2023, 2.2 percent in 2024, and 1.9 percent in 2025.

Overall for 2022, the average annual unemployment rate is estimated to be 3.8 percent. The forecast projects a decrease to 3.6 percent in 2023, 3.2 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 2.5 percent in 2023, 2.9 percent in 2024 and 3.0 percent in 2025.

Hawaii’s consumer inflation rate, as measured by the Honolulu Consumer Price Index, for All Urban Consumers, is estimated to increase 6.3 percent in 2022. The forecast then projects an increase 3.2 percent in 2023, 2.3 percent in 2024, and 2.2 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 1,440 1,441 1,444 1,446
Visitor arrivals (thousands) ³ 2,708 6,778 9,191 9,838 10,223 10,503
Visitor days (thousands) ³ 28,660 65,312 85,476 88,909 90,748 92,456
Visitor expenditures (million dollars) ³ 5,162 13,154 19,101 20,862 21,932 23,015
Honolulu CPI-U (1982-84=100) 286.0 296.8 315.6 325.8 333.1 340.3
Personal income (million dollars) 82,527 87,054 86,285 88,442 91,045 93,766
Real personal income (millions of 2012$) 66,459 68,200 64,961 65,455 66,179 66,961
Personal income deflator (2012=100) 124.2 127.6 132.8 135.1 137.6 140.0
Non-agricultural wage & salary jobs (thousands) 559.9 583.5 608.1 627.6 641.4 653.5
Civilian unemployment rate 12.0 5.7 3.8 3.6 3.2 2.9
Gross domestic product (million dollars) 82,885 90,059 97,161 101,421 105,615 109,670
Real gross domestic product (millions of 2012$) 70,625 73,880 75,805 77,131 78,781 80,376
Gross domestic product deflator (2012=100) 117.4 121.9 128.2 131.5 134.1 136.4
Annual Percentage Change
Total population (NA) -0.7 -0.1 0.1 0.2 0.2
Visitor arrivals -73.9 150.3 35.6 7.0 3.9 2.7
Visitor days -68.3 127.9 30.9 4.0 2.1 1.9
Visitor expenditures -71.1 154.8 45.2 9.2 5.1 4.9
Honolulu CPI-U 1.6 3.8 6.3 3.2 2.3 2.2
Personal income 5.1 5.5 -0.9 2.5 2.9 3.0
Real personal income 3.4 2.6 -4.7 0.8 1.1 1.2
Personal income deflator (2012=100) 1.7 2.8 4.1 1.7 1.8 1.8
Non-agricultural wage & salary jobs -15.0 4.2 4.2 3.2 2.2 1.9
Civilian unemployment rate 4 9.5 -6.3 -1.9 -0.2 -0.4 -0.3
Gross domestic product -9.7 8.7 7.9 4.4 4.1 3.8
Real gross domestic product -10.8 4.6 2.6 1.7 2.1 2.0
Gross domestic product deflator (2012=100) 1.1 3.9 5.1 2.6 2.0 1.8

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, August 24, 2022.