Continued Economic Strength Predicted in Current State Forecast
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For Immediate Release: August 17, 2005
DBEDT Release News 05-22
Honolulu--The latest quarterly economic forecast issued by the Department of Business Economic Development and Tourism (DBEDT) continues to expect solid gains in employment, income and visitor arrivals for the rest of 2005 and through 2006.
Presented in the Third Quarter 2005 issue of the Department's Quarterly Statistical and Economic Report, the forecast expects Hawaii's personal income to grow 3.4 percent in real terms this year. Total wage and salary jobs are expected to increase 2.4 percent, compared with a 1.9 percent projection in the last forecast.
"We continue to be pleased with Hawaii's current economic performance and optimistic about the year to come." said DBEDT Director Theodore E. Liu. "In June, our robust job growth once again made Hawaii's unemployment rate the lowest in the nation."
In the second quarter of 2005 there were 16,250 more wage and salary jobs than in the second quarter of 2004, an increase of 2.8 percent. Growth was led by an increase of 3,000 jobs in construction industry jobs. Professional and Business Services contributed the next greatest increase with 2,800 jobs, Retail trade jobs increased by 2,400 and the Transportation, Warehousing and Utilities sector produced an increase of 2,100 jobs.
The Department notes that projected growth in both the U.S and Japan economies should be a sustaining factor in the positive outlook for the state's economy. The U.S. real gross domestic product (GDP) is forecast to grow 3.6 percent in 2005, while Japan's GDP is expected to grow at a moderate 1.4 percent rate.
The tourism industry is expected to host a record 7.4 million visitors in 2005, up 6.1 percent from a very strong 2004. Visitor spending should reach $11.6 billion in 2005 about 6.8 percent higher than 2004.
As in 2004, the report predicts that inflation will affect economic gains this year. The Honolulu Consumer Price Index (CPI-U) is expected to increase by 3.3 percent in 2005, the same inflation rate experienced in 2004. Thus, while Hawaii personal income is expected to show a 6.8 percent growth in current dollars this year, price increases will hold the gain to 3.4 percent in real terms.
2003 to 2008
| Economic Indicators | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 |
|---|---|---|---|---|---|---|
| (Actual) | (Forecast) | |||||
| Total population (thousands) | 1,249 | 1,263 | 1,278 | 1,292 | 1,306 | 1,319 |
| Visitor arrivals (thousands) | 6,442 | 6,992 | 7,420 | 7,622 | 7,810 | 7,987 |
| Visitor days (thousands) | 59,228 | 63,343 | 67,303 | 69,055 | 70,682 | 72,229 |
| Visitor expenditures (million dollars) | 10,055 | 10,862 | 11,599 | 12,250 | 12,881 | 13,508 |
| Honolulu CPI-U (1982-84=100) | 184.5 | 190.6 | 196.9 | 202.6 | 208.1 | 213.5 |
| Personal income (million dollars) | 38,013 | 40,670 | 43,435 | 45,867 | 48,252 | 50,665 |
| Real personal income ($2000 million) | 36,324 | 37,618 | 38,893 | 39,914 | 40,885 | 41,842 |
| Total wage & salary jobs (thousands) | 575 | 590 | 604 | 613 | 621 | 628 |
| Gross state product (million dollars) | 46,303 | 49,544 1/ | 52,814 | 55,560 | 58,338 | 61,139 |
| Real gross state product ($2000 million) | 42,625 | 44,102 1/ | 45,450 | 46,511 | 47,587 | 48,655 |
| Gross state product deflator (2000=100) | 108.6 | 112.3 1/ | 116.2 | 119.5 | 122.6 | 125.7 |
| Annual Percentage Change | ||||||
| Total population | 1.2 | 1.1 | 1.2 | 1.1 | 1.1 | 1.1 |
| Visitor arrivals | -0.2 | 8.5 | 6.1 | 2.7 | 2.5 | 2.3 |
| Visitor days | 0.5 | 6.9 | 6.3 | 2.6 | 2.4 | 2.2 |
| Visitor expenditures | 4.6 | 8.0 | 6.8 | 5.6 | 5.1 | 4.9 |
| Honolulu CPI-U | 2.3 | 3.3 | 3.3 | 2.9 | 2.7 | 2.6 |
| Personal income | 4.2 | 7.0 | 6.8 | 5.6 | 5.2 | 5.0 |
| Real personal income | 1.8 | 3.6 | 3.4 | 2.6 | 2.4 | 2.3 |
| Total wage & salary jobs | 1.9 | 2.6 | 2.4 | 1.5 | 1.3 | 1.2 |
| Gross state product | 5.7 | 7.0 1/ | 6.6 | 5.2 | 5.0 | 4.8 |
| Real gross state product | 3.0 | 3.5 1/ | 3.1 | 2.3 | 2.3 | 2.2 |
| Gross state product deflator | 2.7 | 3.4 1/ | 3.4 | 2.8 | 2.6 | 2.5 |
The Report contains projections for continued growth for the economy in 2006 and beyond, though at a slower pace. Real personal income growth is forecast to moderate from 2.6 percent in 2006 to 2.4 and 2.3 percent in 2007 and 2008. Total job growth is expected to stabilize in the 1.2 to 1.3 percent per year range beyond 2005. Total visitor arrivals are projected to grow 2.7 percent in 2006 and 2.3 percent by 2008.
State General Fund revenues increased by 17.3 percent in the second calendar quarter of 2005 compared with the same quarter a year earlier. General Excise Tax Revenues were up 14.8 percent for the quarter, with net Individual income taxes up 20.5 percent.
The total number of Hawaii bankruptcy filings declined in the first quarter of 2005 over the first quarter of 2004. This makes the thirteenth straight quarter in which total Hawaii bankruptcies decreased.
The 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 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
Russell Pang
Chief of Media Relations, Office of the Governor
Phone: (808) 586-0043
Email: russell.pang@hawaii.gov