Outlook for the Economy
3rd Quarter 2024 Report
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Total visitor arrivals to the state during the first seven months of 2024 fell by 3.3 percent compared to the same period in 2023. Visitor expenditures, measured in current dollars, decreased 3.9 percent year-to-date through July 2024.
The construction industry is booming. Average construction payroll job count reached 41,200 during the first seven months of 2024, a record level for the industry. The value of private building permits increased 19.1 percent during the first seven months of 2024. The value of permits for additions and alterations increased by 29.4 percent and the value of residential permits increased by 24.2 percent, while the permit value for industrial and commercial projects decreased by 31 percent. However, the value of industrial and commercial permits accounted for only 7.9 percent of the total private permit value.
Based on the most recent data from the U.S. Bureau of Economic Analysis, Hawaii’s real gross domestic product (GDP) grew 1.8 percent in the first quarter of 2024 compared to the first quarter of 2023. Hawaii’s personal income grew by 5.5 percent in the first quarter of 2024 compared to the first quarter of 2023.
Hawaii’s labor force (not seasonally adjusted) for the first seven months of 2024 increased 0.4 percent compared to the same period in 2023. Hawaii’s unemployment rate (not seasonally adjusted) averaged 2.9 percent during the first seven months of 2024, ranking seventh lowest among the states in the nation.
State general excise tax collections decreased by 0.1 percent during the first seven months of calendar year 2024 compared to the same period a year ago.
Hawaii’s consumer inflation, measured by the Honolulu Consumer Price Index for All Urban Consumers, was at 4.5 percent in July 2024, 2.4 percentage points higher than Hawaii’s inflation rate of in July 2023 and 1.6 percentage points higher than the national average.
At the national level, the most recent (August 2024) Blue Chip Economic Indicators report, the consensus of 50 economic forecasting organizations, projected the U.S. economy to grow at 2.5 percent in 2024, and 1.8 percent in 2025. DBEDT estimates that the Hawaii’s real GDP will increase by 1.3 percent in 2024, 2.0 percent in 2025, 2.1 percent in 2026, and 2.2 percent in 2027.
Visitor arrivals are projected to decrease by 1.0 percent in 2024 and will improve starting in 2025 as the Japanese visitor market recovery accelerates. Full recovery in arrivals will not happen until 2027 when 10.3 million visitors will come to the state. Visitor spending is projected to be $20.7 billion in 2024 and is expected to increase to $23.9 billion by 2027.
Non-agriculture payroll job growth is expected to increase by 0.8 percent in 2024 and then to 1.3 percent in 2025, 1.2 percent in 2026, and 1.0 percent in 2027. A full recovery of non-agriculture payroll jobs is expected to occur in 2027 when the total will reach 659,700 jobs.
The state unemployment rate is expected to be 2.8 percent in 2024 and will improve to 2.7 percent in 2025 and 2.5 percent in both 2026 and 2027.
Personal income is expected to grow at rates of about 4 percent in the next few years, similar to projections in the previous quarter.
As measured by the Honolulu Consumer Price Index for Urban Consumers, inflation is expected to be at 4.2 percent in 2024, which is higher than the projected U.S. consumer inflation rate of 3.0 percent for the same year. Hawaii consumer inflation is expected to decrease to 2.4 percent by 2027.
Hawaii’s population is expected to decrease by 0.1 percent in 2024, remain flat in 2025, and then increase by 0.2 percent in 2026 and by 0.2 percent in 2027.
| Economic Indicators | 2022 | 2023 ¹ | 2024 | 2025 | 2026 | 2027 |
|---|---|---|---|---|---|---|
| Actual | Forecast | |||||
| Total population (thousands) ² | 1,439 | 1,435 | 1,433 | 1,433 | 1,437 | 1,439 |
| Visitor arrivals (thousands) ³ | 9,234 | 9,658 | 9,565 | 9,841 | 10,092 | 10,323 |
| Visitor days (thousands) ³ | 85,240 | 86,426 | 84,393 | 86,598 | 88,604 | 90,634 |
| Visitor expenditures (million dollars) ³ | 19,800 | 20,866 | 20,744 | 21,712 | 22,770 | 23,874 |
| Honolulu CPI-U (1982-84=100) | 316.1 | 326.0 | 339.5 | 349.9 | 358.8 | 367.5 |
| Personal income (million dollars) | 88,973 | 93,655 | 97,695 | 101,521 | 105,406 | 109,632 |
| Real personal income (millions of constant 2017$) | 69,266 | 70,649 | 71,551 | 72,610 | 73,694 | 74,998 |
| Personal income deflator | 128.5 | 132.6 | 136.5 | 139.8 | 143.0 | 146.2 |
| Non-agricultural wage & salary jobs (thousands) | 618.1 | 632.2 | 637.3 | 645.3 | 653.1 | 659.7 |
| Civilian unemployment rate | 3.5 | 3.0 | 2.8 | 2.7 | 2.5 | 2.5 |
| Gross domestic product (million dollars) | 101,083 | 108,023 | 112,826 | 118,001 | 123,138 | 127,307 |
| Real gross domestic product (millions of chained 2017$) | 85,211 | 86,888 | 88,022 | 89,815 | 91,707 | 93,683 |
| Gross domestic product deflator (2017=100) | 118.6 | 124.3 | 128.2 | 131.4 | 134.3 | 137.0 |
| Annual Percentage Change | ||||||
| Total population | -0.5 | -0.3 | -0.1 | 0.0 | 0.2 | 0.2 |
| Visitor arrivals | 36.2 | 4.6 | -1.0 | 2.9 | 2.5 | 2.3 |
| Visitor days | 30.5 | 1.4 | -2.4 | 2.6 | 2.3 | 2.3 |
| Visitor expenditures | 50.5 | 5.4 | -0.6 | 4.7 | 4.9 | 4.8 |
| Honolulu CPI-U | 6.5 | 3.1 | 4.2 | 3.1 | 2.5 | 2.4 |
| Personal income | 0.0 | 5.3 | 4.3 | 3.9 | 3.8 | 4.0 |
| Real personal income | -4.7 | 2.0 | 1.3 | 1.5 | 1.5 | 1.8 |
| Personal income deflator | 5.0 | 3.2 | 3.0 | 2.4 | 2.3 | 2.2 |
| Non-agricultural wage & salary jobs | 5.3 | 2.3 | 0.8 | 1.3 | 1.2 | 1.0 |
| Civilian unemployment rate 4 | -2.5 | -0.5 | -0.2 | -0.1 | -0.1 | -0.1 |
| Gross domestic product | 8.6 | 6.9 | 4.4 | 4.6/td> | 4.4 | 4.2 |
| Real gross domestic product | 1.3 | 2.0 | 1.3 | 2.0 | 2.1 | 2.2 |
| Gross domestic product deflator | 7.2 | 4.8 | 3.1 | 2.5 | 2.2 | 2.0 |
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, September 5, 2024.