State of the Economy

1st Quarter 2024 Report

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Hawaii’s major economic indicators were mixed in the fourth quarter of 2023. State general fund tax revenues, wage and salary jobs, and government contracts awarded increased in the quarter compared to the fourth quarter of 2022. However, visitor arrivals and private building authorizations decreased.

In the fourth quarter of 2023, the total number of visitors arriving by air to Hawaii decreased 38,481 or 1.7 percent and the daily visitor census decreased 11,047 or 4.7 percent compared to the fourth quarter of 2022.

In the fourth quarter of 2023, the construction sector lost 700 jobs or 1.8 percent compared with the same quarter of 2022. In the fourth quarter of 2023, the permit value for private construction decreased $392.2 million or 30.3 percent; however, government contracts awarded increased $180.0 million or 34.4 percent, compared with the same quarter of 2022.

According to the most recent excise tax base data available, contracting tax base increased $292.4 million or 10.5 percent in the third quarter of 2024, compared with the same quarter of the previous year. For the first three quarters of 2023 contracting tax base increased $773.3 million or 9.7 percent compared with the same period of the previous year.

In the fourth quarter of 2023, State general fund tax revenues increased $191.5 million or 9.5 percent over the same period of 2022. The state general excise tax revenue increased $30.6 million or 2.9 percent, the net individual income tax revenues increased $139.3 million or 23.3 percent, the net corporate income tax revenues increased $25.0 million or 37.4 percent, and the transient accommodations tax (TAT) decreased $3.8 million or 2.1 percent. In 2023, State general fund tax revenues increased $63.5 million or 0.7 percent compared to the previous year.

Labor market conditions were mixed. Hawaii’s non-agricultural wage and salary jobs averaged 637,700 jobs, an increase of 5,000 jobs or 0.8 percent.

The job increase in the fourth quarter of 2023 was due to job increases in both the private sector and the government sector. In this quarter, the private sector added about 1,800 non-agricultural jobs compared to the fourth quarter of 2022. The majority of the private sector industries added jobs in the quarter. The number of jobs increased the most in Health Care and Social Assistance, which added 1,300 jobs or 1.8 percent, followed by Food Services and Drinking Places, which added 1,100 jobs or 1.7 percent, Private Educational Services, which added 900 jobs or 6.1 percent, and Professional and Business Services, which added 700 jobs or 1.0 percent, in the quarter. The Government sector added 3,200 jobs or 2.6 percent. The Federal Government added 400 jobs or 1.1 percent, the State Government added 2,600 jobs or 3.7 percent, and the Local Government added 400 jobs or 2.2 percent in the quarter.

In the third quarter of 2023, total annualized nominal GDP increased $6,668 million or 6.5 percent, from the third quarter of 2022. In the first three quarters of 2023, total annualized nominal GDP increased $7,677 million or 7.7 percent from the same period of the previous year. In the third quarter of 2023, total annualized real GDP (in chained 2017 dollars) increased $1,780 million or 2.1 percent from the third quarter of 2022. In the first three quarters of 2023, total annualized real GDP increased $1,918 million or 2.3 percent from the same period of the previous year.

In the third quarter of 2023, total non-farm private sector annualized earnings increased $2,605.1 million or 5.8 percent from the third quarter of 2022. In dollar terms, the largest increase occurred in Health Care and Social Assistance, followed by Transportation and Warehousing; and Accommodation and Food Services; Other Services, except Public Administration; and Professional, Scientific, and Technical Services. During the third quarter of 2023, total government earnings increased $1,405.9 million or 8.3 percent from the same quarter of 2022. Earnings from the federal government increased $797.7 million. Earnings from the state and local governments increased $608.2 million in the quarter.

In the second half of 2023, Honolulu’s Consumer Price Index for Urban Consumers (CPI-U) increased 2.9 percent from the same period in 2022. This is 0.5 percentage point below the 3.4 percent increase for the U.S. average CPI-U. It is also lower than the 6.3 percent increase in the Honolulu CPI-U for the second half of 2022 compared to the same period of the previous year. In the second half of 2023, the Honolulu CPI-U increased the most in Apparel (13.0 percent), followed by Other Goods and Services (8.3 percent), Recreation (6.7 percent), Medical Care (4.7 percent), Food and Beverages (4.3 percent), Housing (3.1 percent), and Education and Communication (1.2 percent) compared to the second half of 2022. Transportation decreased 2.6 percent in the second half of 2023 compared to the same period in 2022.