State Economic Outlook Remains Optimistic
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For Immediate Release: March 23, 2004
DBEDT Release News 04-08
Honolulu--A new quarterly economic forecast issued by the Department of Business Economic Development and Tourism continues to expect solid gains in employment, income and visitor arrivals for the balance of 2004.
"We continue to be encouraged by the consistent strength of employment and income gains since mid 2003," said DBEDT Director Theodore E. Liu. "Once the construction industry is fully back to work, we expect to see that economic momentum continue."
Presented in the March 2004 issue of the Department’s Quarterly Statistical and Economic Report, the updated forecast for the state’s economy now anticipates a 2.6% increase in real Gross State Product in 2004, accompanied by a 1.5% increase in the wage and salary job count.
The report does take note of the concrete strike that has stalled construction activity statewide since early February. However, it concludes that if the dispute is settled soon, much of the delayed construction can likely be made up over the coming months. The report notes that a slight rise in consumer prices forecast for 2004 and a slower rebound than anticipated in the Japan visitor market in early 2004 has resulted in a slightly lower growth forecast for most economic indicators in the latest forecast.
Visitor arrivals for the year are now expected to increase by 5.2% in 2004. With a recovering Japan economy and a favorable exchange rate for Japanese traveling here, the Japanese market recovery may accelerate as the year progresses. The report expects total visitor days to increase 4.0% and total expenditures in current dollars to increase 6.5%.
An additional 8,300 jobs are expected in 2004, a 1.5 percent gain. Personal income measured in current dollars is expected to show a 5.1% increase in 2004. This would amount to a 2.8% increase in real terms, after inflation is taken into account. The Honolulu Consumer Price Index is expected to advance by 2.2% in 2004. This compares to the 2.0% increase forecast in December.
| Economic Indicators | 2002 (Actual) |
2003 (Actual) |
2004 (Forecast) |
2005 (Forecast) |
2006 (Forecast) |
2007 (Forecast) |
|---|---|---|---|---|---|---|
| Total population (thousands) | 1,237.0 ¹ | 1,249.0 ¹ | 1,261.7 | 1,274.6 | 1,287.8 | 1,301.0 |
| Visitor arrivals (thousands) | 6,452.8 | 6,402.2 | 6,736.7 | 6,969.5 | 7,139.7 | 7,313.0 |
| Visitor days (thousands) | 60,515.1 | 62,285.2 | 64,770.5 | 66,568.6 | 67,876.5 | 69,212.4 |
| Visitor expenditures (million dollars) | 9,993.8 | 10,460.0 | 11,136.2 | 11,708.4 | 12,231.5 | 12,777.4 |
| Honolulu CPI-U (1982-84=100) | 180.3 | 184.5 | 188.6 | 192.3 | 196.2 | 200.3 |
| Personal income (million dollars) | 37,397.0 | 39,176.0 p | 41,174.0 | 43,232.7 | 45,178.1 | 47,256.3 |
| Real personal income ($1996 million) | 35,405.8 | 36,245.8 p | 37,274.3 | 38,370.6 | 39,311.0 | 40,273.6 |
| Total wage & salary jobs (thousands) | 562.6 | 574.7 | 583.0 | 590.6 | 597.7 | 604.3 |
| Gross state product (million dollars) | 45,753.2 p | 48,040.9 p | 50,443.0 | 52,864.2 | 55,296.0 | 57,839.6 |
| Real gross state product ($1996 million) | 39,896.5 p | 41,029.7 p | 42,094.0 | 43,103.6 | 44,072.7 | 45,063.6 |
| Gross state product deflator (1996=100) | 114.7 p | 117.1 p | 119.8 | 122.6 | 125.5 | 128.4 |
| Annual Percentage Change | ||||||
| Total population | 1.0 ¹ | 1.0 ¹ | 1.0 | 1.0 | 1.0 | 1.0 |
| Visitor arrivals | 1.6 | -0.8 | 5.2 | 3.5 | 2.4 | 2.4 |
| Visitor days | 4.1 | 2.9 | 4.0 | 2.8 | 2.0 | 2.0 |
| Visitor expenditures | 8.7 | 4.7 | 6.5 | 5.1 | 4.5 | 4.5 |
| Honolulu CPI-U | 1.1 | 2.3 | 2.2 | 2.0 | 2.0 | 2.1 |
| Personal income | 5.0 | 4.8 p | 5.1 | 5.0 | 4.5 | 4.6 |
| Real personal income | 3.9 | 2.4 p | 2.8 | 2.9 | 2.5 | 2.4 |
| Total wage & salary jobs | 0.0 | 2.1 | 1.5 | 1.3 | 1.2 | 1.1 |
| Gross state product | 4.7 p | 5.0 p | 5.0 | 4.8 | 4.6 | 4.6 |
| Real gross state product | 2.7 p | 2.8 p | 2.6 | 2.4 | 2.2 | 2.2 |
| Gross state product deflator | 1.9 p | 2.1 p | 2.3 | 2.3 | 2.3 | 2.3 |
¹ DBEDT estimate. U.S. Census Bureau is currently reviewing its Hawaii estimates.
Source: Hawaii State Department of Business, Economic Development & Tourism, March 17, 2004
The report expects economic growth to continue in the 2005 to 2007 period but at a somewhat slower pace. Real GSP growth is forecast to ease gradually from a 2.4% rate in 2005 to a 2.2% rate in 2006 and 2007. Jobs growth will likely slow from 1.3% in 2005 to 1.1% by 2007. Personal income in real terms is expected to grow 2.9% in 2005 and then ease to about 4.5% in the 2006 to 2007 period.
Visitor arrivals, as well as days spent in Hawaii and expenditures, will also likely moderate to more normal growth beyond 2004. Arrivals should ease from a 3.5% increase in 2005 to 2.4% in 2006 and 2007. Current dollar visitor expenditures are expected to increase 5.1% in 2005 and 4.5% in 2006 and 2007.
The Quarterly Statistical and Economic Report also 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 also available on the DBEDT website, at http://www.hawaii.gov/dbedt/info/economic/data_reports/qser.
For more information, contact:
Dave Young
Communications
Phone: (808) 587-1212
Email: dyoung@dbedt.hawaii.gov