Outlook for the Economy
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4th Quarter 2011
Based on the most recent development in the national and global economy, the performance of Hawaii's tourism industry, the labor market conditions in the state, and growth of personal income and tax revenues, Hawaii's economy is expected to continue positive growth for the rest of 2011 and into 2012. Overall, the current DBEDT forecast is more optimistic compared with the previous forecast.
Hawaii's economy depends significantly on conditions in the U.S. economy and key international economies, especially Japan. According to the November 2011 Blue Chip Economic Consensus Forecasts, U.S. real GDP is expected to increase by 1.8 percent in 2011 as a whole, same as the growth rate projected in the August 2011 forecast. However, for 2012 the consensus forecast expects an overall 2.1 percent growth in U.S. real GDP, lower than the 2.5 percent growth rate projected in the August 2011 forecast.
Forecasts for Japan were unchanged in 2011 but revised downward for 2012 in the November 2011 Blue Chip Economic Consensus Forecasts. Real GDP growth for Japan is now expected to decrease 0.6 percent in 2011, same as the decrease projected in the August 2011 forecast. However, for 2012, the consensus forecast now expects an overall 2.2 percent growth in Japanese real GDP, lower than the 3.1 percent growth projected in the August 2011 forecast.
For the local economy, DBEDT expects that most of the economic indicators, especially personal income, will grow at faster rates compared with previously forecasted.
Overall, Hawaii's economy measured by real GDP is projected to show a 1.4 percent increase in 2011, up 0.1 percentage point from the 1.3 percent growth forecast last quarter. That growth is currently expected to increase to 1.7 percent in 2012, slightly lower than the previous forecast.
Visitor arrivals are expected to increase 2.5 percent in 2011, 0.5 of a percentage point lower than the previous forecast of 3.0 percent. The forecast for visitor days in 2011 is now expected to increase 4.0 percent, 0.4 percentage point lower than the previous forecast. The forecast for visitor expenditure in 2011; however, is revised upward to 13.1 percent, from 12.0 percent growth projected in the previous forecast. For 2012, the growth rates of visitor arrivals, visitor days, and visitor expenditures are now expected to be 3.4 percent, 3.0 percent, and 5.6 percent, respectively.
The projection for wage and salary jobs in 2011 changed from a 1.5 percent growth in the previous forecast to a 1.3 percent growth in the current forecast. In 2012, jobs are now projected to increase 1.6 percent - 0.2 percentage point lower than the previous forecast.
The Honolulu Consumer Price Index (CPI), which increased 3.5 percent in the first half of 2011, is expected to increase 3.3 percent in 2011, 0.3 percentage point higher than the previous forecast. In 2012, the CPI is projected to increase 2.8 percent.
Personal income in current dollars is expected to grow 4.6 percent in 2011, 0.8 percentage point higher than the growth in the previous forecast. Due to higher projected inflation, the real personal income is currently projected to grow 1.3 percent in 2011, 0.5 percentage point above previous forecast. In 2012, current-dollar personal income and real personal income are expected to increase 4.0 percent and 1.2 percent, respectively.
Beyond 2012 the economy will be on the expansion path with job growth of 1.8 percent in 2013 and 1.5 percent in 2014. Visitor arrivals are expected to increase 2.0 percent in 2013 and 2.2 percent in 2014. Visitor expenditures are expected to increase 4.5 percent in 2013 and 4.4 percent in 2014. Real personal income is projected to increase 2.0 percent in 2013 and 2.4 percent in 2014. Hawaii's real GDP growth is expected to reach 2.0 percent in 2013 and 2.2 percent in 2014.
| Economic Indicators | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | |
|---|---|---|---|---|---|---|---|
| Actual | Forecast | ||||||
| Total population (thousands) | 1,347 | 1,364 | 1,377 | 1,391 | 1,405 | 1,419 | |
| Visitor arrivals (thousands) ¹ | 6,517 | 7,084 | 7,262 | 7,509 | 7,660 | 7,831 | |
| Visitor days (thousands) ¹ | 60,837 | 66,112 | 68,768 | 70,842 | 72,337 | 73,962 | |
| Visitor expenditures (million dollars) ¹ | 9,993 | 11,167 | 12,625 | 13,338 | 13,937 | 14,544 | |
| Honolulu CPI-U (1982-84=100) | 230.0 | 234.9 | 242.6 | 249.4 | 255.6 | 262.0 | |
| Personal income (million dollars) | 54,786 | 56,811 | 59,424 | 61,801 | 64,644 | 67,876 | |
| Real personal income (millions of 2000$) ² | 41,986 | 42,644 | 43,180 | 43,684 | 44,579 | 45,667 | |
| Total wage & salary jobs (thousands) | 597.7 | 593.2 | 600.9 | 610.5 | 621.5 | 630.8 | |
| Gross domestic product (million dollars) | 65,428 | 66,760 | 68,970 | 71,405 | 74,144 | 77,215 | |
| Real gross domestic product (millions of 2005$) | 58,602 | 59,329 | 60,150 | 61,233 | 62,457 | 63,831 | |
| Gross domestic product deflator (2005=100) | 111.6 | 112.5 | 114.7 | 116.6 | 118.7 | 121.0 | |
| Annual Percentage Change | |||||||
| Total population | 1.1 | 1.3 | 1.0 | 1.0 | 1.0 | 1.0 | |
| Visitor arrivals ¹ | -4.5 | 8.7 | 2.5 | 3.4 | 2.0 | 2.2 | |
| Visitor days ¹ | -4.7 | 8.7 | 4.0 | 3.0 | 2.1 | 2.2 | |
| Visitor expenditures ¹ | -12.3 | 11.7 | 13.1 | 5.6 | 4.5 | 4.4 | |
| Honolulu CPI-U | 0.5 | 2.1 | 3.3 | 2.8 | 2.5 | 2.5 | |
| Personal income | -0.9 | 3.7 | 4.6 | 4.0 | 4.6 | 5.0 | |
| Real personal income ² | -1.4 | 1.6 | 1.3 | 1.2 | 2.0 | 2.4 | |
| Total wage & salary jobs | -4.4 | -0.8 | 1.3 | 1.6 | 1.8 | 1.5 | |
| Gross domestic product | -1.0 | 2.0 | 3.3 | 3.5 | 3.8 | 4.1 | |
| Real gross domestic product | -2.6 | 1.2 | 1.4 | 1.8 | 2.0 | 2.2 | |
| Gross domestic product deflator | 1.6 | 0.8 | 1.9 | 1.7 | 1.8 | 1.9 | |
1/ Visitors who came to Hawaii by air or by cruise ship.
2/ DBEDT calculated using BEA estimate of nominal personal income deflated by U.S. Bureau of Labor Statistics Honolulu CPI-U.
Source: Hawaii State Department of Business, Economic Development & Tourism, November 22, 2011.