Growth in Hawai'i's Economy Slows
Document Actions
For Immediate Release: November 18, 2008
DBEDT Release News 08-37
HONOLULU--In its latest quarterly economic report, the Department of Business, Economic Development & Tourism (DBEDT) expects financial conditions in U.S. and international markets to forestall growth in Hawai‘i's economy through 2009.
"Hawai‘i's economy has so far avoided the degree of economic slowdown experienced nationally. However, the impact of the financial uncertainties can be seen in the slowing of our construction and tourism sectors and will impact the state's economy through next year," said DBEDT Director Theodore E. Liu. "There are a couple of bright spots that we can point to including continued federal and military spending in Hawai‘i, as well as an aggressive effort by the state to accelerate capital improvement construction projects."
DBEDT's updated forecast expects the state's real gross domestic product (GDP) to show only slight growth in 2008 and no growth in 2009. Real personal income is forecast to decline slightly in both 2008 and 2009. Total wage and salary jobs will likely show no growth in 2008 and slight decline in 2009. Total visitor arrivals and expenditures are both forecast to decline substantially in 2008 and to a lesser extent in 2009.
Total visitor arrivals are currently expected to decline 10.1 percent in 2008, followed by a 1.9 percent decrease in 2009. Assuming key U.S. and international markets begin economic growth in the second half of 2009, visitor arrivals are projected to increase by 1.4 percent and 1.7 percent in 2010 and 2011, respectively.
Real personal income (adjusted for inflation) is now estimated to decline by a slight 0.2 percent in 2008. In 2009, real personal income is projected to decline 0.4 percent. Real increases in personal income are expected in 2010 and 2011 of 1.0 percent and 1.5 percent respectively.
Inflation is expected to fall substantially over the next year or two, as the cost of shelter stabilizes and oil prices recede below the peaks seen in the first half of 2008. DBEDT expects an increase in the Honolulu Consumer Price Index (CPI-U) of just 2.6 percent in 2009 and 2.4 percent in 2010. This is down sharply from the 4.2 percent increase expected for 2008 and the 4.9 percent increase experienced in 2007.
The Honolulu Consumer Price Index (CPI), a proxy for inflation, is expected to rise 4.2 percent in 2008, 0.3 of a percentage point lower than in the previous forecast. The CPI growth for 2009 is projected to be 2.6 percent, 0.9 of a percentage point lower than in the previous forecast.
In response to slower job growth in the latest quarter and lower forecasts of visitor arrivals, the 2008 forecast of wage and salary job growth has been lowered to 0.0 percent from 0.2 percent in the previous forecast. The job growth forecast for 2009 is also decreased to negative 0.2 percent from positive 0.5 percent in the previous forecast.
Real GDP is projected to grow 0.3 percent in 2008 and 0.0 percent in 2009, respectively, down 1.6 and 2.0 percentage points, respectively, from the previous forecast.
The DBEDT Quarterly Statistical and Economic Report contains more than 100 tables of the most recent quarterly data on Hawai‘i'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.
| Economic Indicators | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | |
|---|---|---|---|---|---|---|---|
| (Actual) | (Forecast) | ||||||
| Total population (thousands) | 1,279 | 1,283 | 1,292 | 1,303 | 1,316 | 1,329 | |
| Visitor arrivals (thousands) ¹ | 7,628 | 7,628 | 6,860 | 6,732 | 6,829 | 6,943 | |
| Visitor days (thousands) ¹ | 69,885 | 70,075 | 63,276 | 62,173 | 63,080 | 64,170 | |
| Visitor expenditures (million dollars) ¹ | 12,492 | 12,811 | 11,598 | 11,680 | 12,199 | 12,774 | |
| Honolulu CPI-U (1982-84=100) | 209.4 | 219.5 | 228.7 | 234.7 | 240.3 | 246.3 | |
| Personal income (million dollars) | 47,338 | 50,130 | 52,138 | 53,297 | 55,130 | 57,361 | |
| Real personal income (millions of 2000$) ² | 39,865 | 40,263 | 40,188 | 40,040 | 40,447 | 41,057 | |
| Total wage & salary jobs (thousands) | 624.0 | 630.1 | 630.2 | 629.0 | 632.3 | 637.6 | |
| Gross domestic product (million dollars) | 58,676 | 61,532 | 63,398 | 64,971 | 67,256 | 70,026 | |
| Real gross domestic product (millions of 2000$) | 48,428 | 49,860 | 50,006 | 50,015 | 50,561 | 51,359 | |
| Gross domestic product deflator (2000=100) | 121.2 | 123.4 | 126.8 | 129.9 | 133.0 | 136.3 | |
| Annual Percentage Change | |||||||
| Total population | 0.9 | 0.4 | 0.7 | 0.8 | 1.0 | 1.0 | |
| Visitor arrivals ¹ | 1.8 | 0.0 | -10.1 | -1.9 | 1.4 | 1.7 | |
| Visitor days ¹ | 2.4 | 0.3 | -9.7 | -1.7 | 1.5 | 1.7 | |
| Visitor expenditures ¹ | 4.9 | 2.6 | -9.5 | 0.7 | 4.4 | 4.7 | |
| Honolulu CPI-U | 5.8 | 4.9 | 4.2 | 2.6 | 2.4 | 2.5 | |
| Personal income | 7.3 | 5.9 | 4.0 | 2.2 | 3.4 | 4.0 | |
| Real personal income ² | 1.4 | 1.0 | -0.2 | -0.4 | 1.0 | 1.5 | |
| Total wage & salary jobs | 2.5 | 1.0 | 0.0 | -0.2 | 0.5 | 0.8 | |
| Gross domestic product | 7.0 | 4.9 | 3.0 | 2.5 | 3.5 | 4.1 | |
| Real gross domestic product | 3.2 | 3.0 | 0.3 | 0.0 | 1.1 | 1.6 | |
| Gross domestic product deflator | 3.7 | 1.9 | 2.7 | 2.5 | 2.4 | 2.5 | |
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 17, 2008.
For more information, contact:
Dave Young, DBEDT Communications
Phone: (808) 587-1212
Email: dyoung@dbedt.hawaii.gov