Continued Economic Strength Predicted in Current State Forecast
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For Immediate Release: November 16, 2005
DBEDT Release News 05-32
Honolulu--The latest quarterly economic forecast issued by the Department of Business Economic Development and Tourism (DBEDT) continues to expect gains in employment, income and visitor arrivals through 2008.
Presented in the Fourth Quarter 2005 issue of the Department's Quarterly Statistical and Economic Report, the forecast expects Hawaii's personal income to grow 3.5 percent in real terms this year. Total wage and salary jobs are expected to increase 2.7 percent.
"We remain optimistic that Hawaii's current economic performance can be sustained throughout the next few years." said DBEDT Director Theodore E. Liu. "Our robust job growth continues to make Hawaii's unemployment rate the lowest in the nation."
In the third quarter of 2005 there were 26,150 more people employed in Hawaii than in the third quarter of 2004, an increase of 4.4 percent. This is the highest rate of quarterly employment growth in Hawaii since the early 1990s. Economic growth was led by an increase of 3,050 jobs in Professional and Business Services. Construction contributed the next greatest increase with 2,900 jobs, Transportation, Warehousing and Utilities increase 2,350 jobs and the Retail Trade sector produced an increase of 2,300 jobs.
The Department notes that the U.S. real gross domestic product (GDP) is forecast to grow 3.3 percent in 2006, while Japan's GDP is expected to grow at a moderate 1.9 percent rate.
The tourism industry is now expected to host a total of 7.4 million visitors this year, up 6.5 percent from a very strong 2004. Visitor spending should reach $11.6 billion in 2005 about 6.9 percent higher than 2004.
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 | 7,446 | 7,661 | 7,853 | 8,041 |
| Visitor days (thousands) | 59,228 | 63,343 | 67,469 | 69,434 | 71,156 | 72,846 |
| Visitor expenditures (million dollars) | 10,055 | 10,862 | 11,610 | 12,288 | 12,934 | 13,589 |
| Honolulu CPI-U (1982-84=100) | 184.5 | 190.6 | 197.1 | 203.7 | 209.4 | 215.1 |
| Personal income (million dollars) | 38,126 | 41,176 | 44,047 | 46,778 | 49,350 | 51,966 |
| Real personal income (million $2000) | 36,431 | 38,086 | 39,402 | 40,495 | 41,551 | 42,587 |
| Total wage & salary jobs (thousands) | 574.8 | 589.6 | 605.5 | 614.8 | 622.8 | 630.2 |
| Gross state product (million dollars) | 46,671 | 50,322 | 53,744 | 56,861 | 59,875 | 62,928 |
| Real gross state product (million $2000) | 42,964 | 44,976 1/ | 46,545 | 47,856 | 49,068 | 50,215 |
| Gross state product deflator (2000=100) | 108.6 | 111.9 1/ | 115.5 | 118.8 | 122.0 | 125.3 |
| Annual Percentage Change | ||||||
| Total population | 1.2 | 1.1 | 1.2 | 1.1 | 1.1 | 1.1 |
| Visitor arrivals | -0.2 | 8.5 | 6.5 | 2.9 | 2.5 | 2.4 |
| Visitor days | 0.5 | 6.9 | 6.5 | 2.9 | 2.5 | 2.4 |
| Visitor expenditures | 4.6 | 8.0 | 6.9 | 5.8 | 5.3 | 5.1 |
| Honolulu CPI-U | 2.3 | 3.3 | 3.4 | 3.3 | 2.8 | 2.7 |
| Personal income | 4.8 | 8.0 | 7.0 | 6.2 | 5.5 | 5.3 |
| Real personal income | 2.4 | 4.5 | 3.5 | 2.8 | 2.6 | 2.5 |
| Total wage & salary jobs | 1.9 | 2.6 | 2.7 | 1.5 | 1.3 | 1.2 |
| Gross state product | 6.5 | 7.8 | 6.8 | 5.8 | 5.3 | 5.1 |
| Real gross state product | 3.8 | 4.7 1/ | 3.5 | 2.8 | 2.5 | 2.3 |
| Gross state product deflator | 2.7 | 3.0 1/ | 3.2 | 2.9 | 2.7 | 2.7 |
1/ DBEDT-adjusted U.S. Bureau of Economic Analysis accelerated estimate.
Source: Hawaii State Department of Business, Economic Development & tourism, November 14, 2005.
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 to 2.8 percent in 2006 and 2.6 and 2.5 percent in 2007 and 2008. Total job growth is expected to stabilize in the 1.5 to 1.2 percent per year range beyond 2005.
State General Fund revenues increased by 16.2 percent in the third calendar quarter of 2005 compared with the same quarter a year earlier. General Excise Tax Revenues were up 11.6 percent for the quarter, with net Individual income taxes up 11.0 percent.
The total number of Hawaii bankruptcy filings increased in the first quarter of 2005 over the first quarter of 2004. This was the first time in almost four years that total Hawaii bankruptcies increased, possibly because of an expected change in the bankruptcy law next year.
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 here.
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