Outlook for the Economy

4th Quarter 2023 Report

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The August 8, 2023 Maui wildfires have had a significant impact on the State’s economy. The impacts are most pronounced for Maui County. Between August 2023 and October 2023, visitor arrivals by air to Maui County decreased 51.4 percent compared to the same period in 2022. Total visitor arrivals by air to the state decreased by 6.2 percent during this three-month period.

The number of unemployed persons (not seasonally adjusted) in Maui County increased by 87.1 percent for the period August 2023 through October 2023 compared to the same period in 2022. Maui County’s unemployment rate (not seasonally adjusted) in October 2023 was 7.1 percent. The statewide unemployment rate (not seasonally adjusted) in October 2023 was 3.1 percent, half of a percentage point lower than the national average.

During the three months between August and October 2023, state general excise tax collection decreased 1.7 percent from the same period in 2022.

The impacts of the Maui wildfires on the State’s economic indicators to date are mitigated by Hawaii’s strong economic performance through July 2023. Total visitor arrivals for the first ten months of 2023 increased by 5.5 percent compared to the same period in 2022. The state added 2.6 percent more non-agricultural payroll jobs (not seasonally adjusted) in the first ten months of 2023 compared to the same period in 2022. The state’s unemployment rate (not seasonally adjusted) through the first ten months of 2023 averaged 3.0 percent, half of a percentage point lower than the same period in 2022 and 0.4 percentage point higher compared to the same period in 2019.

The total value of private building permits issued during the first ten months of 2023 increased by 4.2 percent from the same period a year ago. The permit value for additions and alterations increased by 25.3 percent, the value for commercial and industrial permits increased by 9.5 percent, and the value of residential permits decreased by 12.6 percent.

As a comprehensive measure of economic activity, the general excise tax revenue collections increased by 5.1 percent in the first ten months of 2023 compared to the same period in 2022.

Hawaii’s real gross domestic product (GDP) recovered to 97.7 percent in the second quarter of 2023 compared to the same period in 2019.

The most recent economic projections at the national level, by the top 50 economic forecasting organizations, published in Blue Chip Economic Indicators (November 10, 2023), indicate that U.S. economic growth is expected to be 2.4 percent in 2023 and 1.2 percent in 2024. DBEDT estimates that the state’s real GDP will increase by 1.9 percent in 2023 and 1.3 percent in 2024. In 2025 and 2026, economic growth for Hawaii is expected to be 1.9 percent and 2.0 percent respectively.

Visitor arrivals are projected to be 9.6 million in 2023, lower than previously projected. Visitor arrivals are now expected to increase to over 10 million from 2025 instead of 2024. Visitor spending is projected to be $20.9 billion in 2023 and is expected to increase to $23.5 billion by 2026.

Non-agriculture payroll jobs are forecast to increase by 2.2 percent in 2023. The payroll job counts are projected to increase by 1.6 percent in 2024, 1.6 percent in 2025, and 1.4 percent in 2026.

The state unemployment rate is forecast to be 3.0 percent in 2023, and will improve to 2.8 percent in 2024, 2.6 percent in 2025, and 2.4 percent in 2026.

Personal income is forecast to grow by 4.5 percent in 2023, higher than the projection made in the previous quarter. Personal income is expected to grow by 3.8 percent in 2024, 4.0 percent in 2025, and 4.2 percent in 2026.

As measured by the Honolulu Consumer Price Index for Urban Consumers, inflation is expected to be 2.8 percent in 2023, still lower than the projected U.S. consumer inflation rate of 4.1 percent for the same year. Hawaii consumer inflation is expected to decrease to 2.2 percent by 2026.

Hawaii’s population is projected to decrease by 0.2 percent in 2023, decrease by 0.1 percent in 2024, and increase by 0.1 percent in 2025 and in 2026.

ACTUAL AND FORECAST OF KEY ECONOMIC INDICATORS FOR HAWAII: 2022 TO 2026
Economic Indicators 2021 2022 2023 2024 2025 2026
Actual Forecast
Total population (thousands) 1 1,447 1,440 1,438 1,436 1,437 1,439
Visitor arrivals (thousands) 2 6,778 9,234 9,608 9,800 10,061 10,313
Visitor days (thousands) 2 65,312 85,240 86,243 86,873 88,301 89,783
Visitor expenditures (million dollars) 2 13,154 19,800 20,931 21,631 22,542 23,461
Honolulu CPI-U (1982-84=100) 296.8 316.1 325.1 333.4 341.3 348.9
Personal income (million dollars) 88,948 88,973 92,977 96,510 100,371 104,586
Real personal income (millions of 2017$) 77,707 72,971 74,034 74,754 75,774 77,182
Personal income deflator (2017=100) 114.5 121.9 125.6 129.1 132.5 135.5
Non-agricultural wage & salary jobs (thousands) 586.9 618.1 631.7 641.8 651.9 661.1
Civilian unemployment rate 6.0 3.5 3.0 2.8 2.6 2.4
Gross domestic product (million dollars) 93,090 101,083 105,397 109,553 113,960 118,338
Real gross domestic product (millions of 2017$) 84,122 85,211 86,830 87,959 89,674 91,489
Gross domestic product deflator (2017=100) 110.7 118.6 121.4 124.5 127.1 129.4
Annual Percentage Change
Total population -0.3 -0.5 -0.2 -0.1 0.1 0.1
Visitor arrivals 150.3 36.2 4.1 2.0 2.7 2.5
Visitor days 127.9 30.5 1.2 1.6 1.6 1.2
Visitor expenditures 154.8 50.5 5.7 4.3 4.2 3.6
Honolulu CPI-U 3.8 6.5 2.8 2.5 2.4 2.2
Personal income 7.5 0.0 4.5 3.8 4.0 4.2
Real personal income 1.1 -6.1 1.5 1.0 1.4 1.9
Personal income deflator 4.5 6.5 3.0 2.8 2.6 2.3
Non-agricultural wage & salary jobs 4.8 5.3 2.2 1.6 1.6 1.4
Civilian unemployment rate 3 -5.7 -2.5 -0.5 -0.2 -0.2 -0.2
Gross domestic product 10.0 8.6 4.3 3.9 4.0 3.8
Real gross domestic product 5.7 1.3 1.9 1.3 1.9 2.0
Gross domestic product deflator 4.1 7.2 2.3 2.6 2.0 1.8
1/  July 1 count.
2/  Visitors who came to Hawaii by air and by cruise ship. Expenditures includes supplementary business expenditures.
3/  Absolute change from previous year.
Source:  Hawaii State Department of Business, Economic Development & Tourism, December 7, 2023.