Outlook for the Economy

4th Quarter 2022 Report

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Hawaii’s economy has been greatly impacted by the COVID-19 pandemic. However, during the first nine months of 2022, Hawaii welcomed a total of 6.8 million visitors, representing 88.0 percent recovery from the same period in 2019. U.S. visitor arrivals by air were 13.5 percent higher than those who came during the same period in 2019. International visitors arriving by air recovered 36.7 percent with Canadian visitors leading the recovery at 67.5 percent, Japanese visitors at 9.4 percent, and other international visitors at 57.6 percent. Through September 2022 and measured in current prices, total visitor spending was $14.3 billion, or 7.9 percent higher than the spending during the same period in 2019.

Visitor arrivals by air to the State during the third quarter of 2022 totaled 2,440,647 an increase of 15.8 percent from the same quarter in 2021. The average daily visitor census increased 15.1 percent in the third quarter of 2022.

The value of private building permits showed a decrease of 16.5 percent or $154.5 million during the third quarter of 2022 compared with the same quarter of the previous year. The value for the residential permits decreased by $211.8 million or 39.7 percent from the same period in the previous year; followed by the value of commercial & industrial building permits, which was down by $31.5 million or 24.3 percent, while the additions & alterations category increased by $88.8 million or 32.3 percent during the same period. In the third quarter of 2022, government contracts awarded increased $504.6 million or 104.5 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 1.2 percent growth over the same quarter of the previous year. This was followed by 12.5 percent growth in the second quarter of 2021, 5.0 percent in the third quarter of 2021, 5.7 percent in the fourth quarter of 2021, 3.7 percent in the first quarter of 2022, 1.8 percent in the second quarter of 2022, and 1.8 percent in the third quarter of 2022 as compared to the same quarters of the previous respective years. The Blue Chip Economic Indicators report from November 10, 2022, which is the consensus of 50 economic forecasting organizations, projected that the U.S. economic growth rate for 2022 will increase by 1.8 percent. The report projected a positive 0.2 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 9.3 million visitors in 2022, an increase of 36.7 percent from the 2021 level. Visitor arrivals are projected to increase to 9.8 million in 2023, 10.2 million in 2024, and 10.5 million in 2025. Visitor spending is estimated to increase 47.9 percent in 2022. The forecast then projects an increase of 7.5 percent in 2023, 4.0 percent in 2024, and 5.1 percent in 2025.

Non-agriculture payroll jobs are estimated to increase 4.3 percent in 2022. The forecast projects an increase of 3.0 percent in 2023, 2.3 percent in 2024, and 1.9 percent in 2025.

Overall for 2022, the average annual unemployment rate is estimated to be 3.6 percent. The forecast projects a decrease to 3.5 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 1.0 percent in 2022. The forecast then projects an increase of 2.6 percent in 2023, 2.8 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 6.5 percent in 2022. The forecast then projects an increase 3.1 percent in 2023, 2.3 percent in 2024, and 2.1 percent in 2025.

Hawaii’s population is expected to decrease 0.2 percent in 2022, increase 0.1 percent in 2023, 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 1,439 1,440 1,442 1,444
Visitor arrivals (thousands) ³ 2,708 6,778 9,267 9,816 10,213 10,518
Visitor days (thousands) ³ 28,660 65,312 84,872 87,968 89,798 91,753
Visitor expenditures (million dollars) ³ 5,162 13,154 19,455 20,909 21,743 22,850
Honolulu CPI-U (1982-84=100) 286.0 296.8 316.1 326.1 333.4 340.6
Personal income (million dollars) 83,110 87,858 86,995 89,300 91,817 94,549
Real personal income (millions of 2012$) 66,459 68,552 65,415 65,851 66,452 67,261
Personal income deflator (2012=100) 125.1 127.8 133.0 135.6 138.2 140.6
Non-agricultural wage & salary jobs (thousands) 559.9 583.5 608.9 627.1 641.3 653.4
Civilian unemployment rate 12.0 5.7 3.6 3.5 3.2 2.9
Gross domestic product (million dollars) 82,536 91,096 98,375 102,700 106,973 110,934
Real gross domestic product (millions of 2012$) 70,109 74,547 76,485 77,786 79,419 81,008
Gross domestic product deflator (2012=100) 117.7 122.2 128.6 132.0 134.7 136.9
Annual Percentage Change
Total population (NA) -0.7 -0.2 0.1 0.1 0.1
Visitor arrivals -73.9 150.3 36.7 5.9 4.1 3.0
Visitor days -68.3 127.9 29.9 3.6 2.1 2.2
Visitor expenditures -71.1 154.8 47.9 7.5 4.0 5.1
Honolulu CPI-U 1.6 3.8 6.5 3.1 2.3 2.1
Personal income 5.1 5.7 -1.0 2.6 2.8 3.0
Real personal income 3.4 3.1 -4.6 0.7 0.9 1.2
Personal income deflator (2012=100) 1.7 2.2 4.0 2.0 1.9 1.7
Non-agricultural wage & salary jobs -15.0 4.2 4.3 3.0 2.3 1.9
Civilian unemployment rate 4 9.5 -6.3 -2.1 -0.1 -0.3 -0.3
Gross domestic product -9.7 10.4 8.0 4.4 4.2 3.7
Real gross domestic product -10.8 6.3 2.6 1.7 2.1 2.0
Gross domestic product deflator (2012=100) 1.1 3.8 5.3 2.7 2.0 1.7
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, November 22, 2022.