State Forecasts Remain Positive
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For Immediate Release: November 22, 2011
DBEDT News Release 11-27
HONOLULU—In its fourth quarter 2011 economic report, the Department of Business, Economic Development & Tourism (DBEDT) projected positive economic growth in Hawaii for rest of 2011 and expects to see continued positive growth in 2012.
"We are looking at this glass as half full," said DBEDT Director Richard C. Lim. "Overall, Hawaii has strong economic indicators and the potential to continue our positive growth. The current administration has a strong commitment to economic development and the will to make it happen."
Despite a relative slow down in visitor arrivals in the third quarter of 2011, DBEDT projects that overall visitor arrivals will increase by 2.5 percent for 2011, 0.5 of a percentage point below its previous forecast. However, due to increased average daily visitor spending, total visitor spending is now projected to increase 13.1 percent in 2011, 1.1 percentage point above the previous forecast.
"The double digit visitor expenditure growth is very encouraging," Lim said. "Too often we focus on how many visitors are arriving. It's very important to look at how much they are spending, and this is the driver of our economy. We are happy that our unemployment rate is within the lowest 10 states in the nation, and our general excise tax revenue, an important indicator of our current economic activity, grew by 8.8 percent during the first 9 months of 2011."
The consensus forecast by the top 50 economic forecasting agencies projects a 1.8 percent economic growth rate for U.S. for 2011, same as the growth rate projected in August this year. At the same time, the U.S. consumer inflation rate for 2011 was revised up from 3.0 percent in August to 3.2 percent in the projection completed in early November. Forecasts for Real GDP growth in Japan were unchanged for 2011 but revised downward for 2012 in the November 2011 Blue Chip Economic Indicators forecast.
For the local economy, DBEDT revised most of the economic indicators upward such as personal income, GDP, and visitor expenditures compared with its forecast in August.
The number of wage and salary jobs in Hawaii is now expected to increase 1.3 percent in 2011, slightly lower than the 1.5 percent increase previously projected. Wage and salary jobs increased 1.3 percent during the first three quarters of 2011. As with the national economy, job growth has lagged other economic indicators in Hawaii. We do not expect to see the payroll job count peak above the 630,000 level for several years.
DBEDT expects total visitor arrivals to increase 2.5 percent, slightly lower than the previous forecast. This revision reflects the decline of domestic arrivals, tempered by an increase in international arrivals, especially visitors from Canada. The forecast for visitor days for 2011 is now decreased to 4.0 percent from 4.4 percent.
Due to the increase in oil prices, DBEDT expects the Honolulu Consumer Price Index (CPI), a proxy for inflation, to rise 3.3 percent in 2011- higher than the 3.0 percent projected previously.
The updated forecast for 2011 real gross domestic product for Hawaii is a 1.4 percent growth, 0.1 of a percentage point above the forecast last quarter. The current forecast of current dollar personal income growth in 2011 was revised upward to 4.6 percent, higher than the 3.8 percent previously forecasted. The real personal income forecast in 2011 was also revised upward to 1.3 percent, 0.5 of a percentage point above the previous forecast.
Forecast for 2012 remains optimistic with 1.7 percent real GDP growth, and 1.2% real personal income growth. Job count is expected to accelerate to 1.6 percent. Visitor arrivals will continue to grow at 3.4 percent and visitor spending is projected to grow at 5.6 percent.
The DBEDT Quarterly Statistical and Economic Report contains more than 100 tables of the most recent quarterly data on Hawaii's economy as well as narrative explanations of the trends in these data. The full report is available at: hawaii.gov/dbedt/info/economic/data_reports/qser.
| 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.
For more information, contact:
Dave Young, DBEDT Research and Economic Analysis Division
Phone: (808) 586-2480