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Friday, August 17, 2012
DBEDT: Tourism Only Thing Holding Economy Together
By News Release @ 7:49 PM :: 5179 Views :: Energy, Environment

State Forecasts Stronger Tourism Growth, Modest But Continued Growth Anticipated for Other Economic Indicators

News Release from DBEDT August 16, 2012

HONOLULU—In its third quarter 2012 economic report, the state Department of Business, Economic Development and Tourism (DBEDT) expects continued positive economic growth in Hawai‘i for the rest of 2012 and in 2013, particularly among visitor-related indicators. "We are pleased that visitor arrivals reached an historical high during the first half of 2012," said the DBEDT director, Richard C Lim. "While non-tourism sectors have still not fully rebounded, they are showing positive signs of recovery. That's why we are focused on policy tools and state support in areas such as construction, renewable energy and light manufacturing.

"We have already witnessed what can be accomplished through sound policy and government support in the renewable energy sector, where solar and photovoltaic development accounts for roughly 20 percent of all construction expenditures."

Following a higher-than-expected growth in visitor arrivals in the first half of 2012, DBEDT projects that overall visitor arrivals will increase 8.6 percent for 2012, 2.1 percentage points higher than its previous forecast. Similarly, total visitor spending is now projected to increase 15.2 percent in 2012, 6.2 percentage points above the previous forecast.

Nationally, the consensus forecast by the top 50 economic forecasting agencies projects a 2.2 percent economic growth rate for the United States for 2012, slightly lower than the 2.3 percent growth rate projected in May 2012.

At the same time, the U.S. consumer inflation rate for 2012 was revised down from 2.4 percent in May 2012 to 2.0 percent in the projection completed in early August 2012. However, forecasts for Japanese real GDP growth in 2012 were increased to 2.3 percent from 1.8 percent in the April forecast. Translating those indicators to the local economy, DBEDT analysts decreased the forecasted growth rates of most of the economic indicators such as personal income, GDP and job compared with its forecast in May 2012.

The number of non-agricultural wage and salary jobs in Hawai‘i is expected to increase 1.2 percent in 2012, 0.3 of a percentage point lower than the growth rate of total wage and salary jobs in the state projected in the previous forecast. Non-agricultural wage and salary jobs increased 1.0 percent during the first half of 2012. As with the national economy, job growth has lagged other economic indicators in Hawai‘i.

For other major economic indicators, the current forecasts are also reduced from previous forecasts. DBEDT expects the Honolulu Consumer Price Index (CPI), a proxy for inflation, to rise 2.8 percent in 2012 - 0.2 of a percentage point below the previous forecast.

The forecast for 2012 real gross domestic product for Hawai‘i is a 1.5 percent growth, 0.7 of a percentage point below the forecast last quarter. The current forecast of current dollar personal income growth in 2012 was decreased from 4.8 percent to 4.3 percent, 0.5 of a percentage point lower in the current forecast. The real personal income forecast in 2012 was decreased from 1.7 percent to 1.5 percent, 0.2 of a percentage point lower in the current forecast.

The forecast for 2013 remains mostly unchanged for non-visitor related indicators from the previous forecast, with 2.3 percent real GDP growth and 2.1 percent real personal income growth. Job growth is expected to increase to 1.8 percent.

The forecast for 2013 visitor arrivals increased from 2.2 percent in the previous forecast to 3.5 percent, and visitor spending is projected to grow at 5.6 percent in the current forecast - 2.1 percentage points above 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:



Economic Indicators 2010 2011 2012 2013 2014 2015
Actual Forecast
Total population (thousands) 1,363 1,375 1,389 1,402 1,416 1,431
Visitor arrivals (thousands) ¹ 7,018 7,299 7,929 8,210 8,427 8,637
Visitor days (thousands) ¹ 65,465 68,495 74,967 77,380 79,481 81,520
Visitor expenditures (million dollars) ¹ 11,066 12,255 14,123 14,919 15,688 16,472
Honolulu CPI-U (1982-84=100) 234.9 243.6 250.4 257.0 263.4 270.0
Personal income (million dollars) 56,647 59,297 61,846 64,815 68,185 71,595
Real personal income (millions of 2000$) ² 42,521 42,911 43,537 44,470 45,642 46,755
Non-agricultural wage & salary jobs (thousands) 586.9 592.1 599.2 610.0 619.1 627.2
Gross domestic product (million dollars) 65,599 66,991 70,036 73,294 76,705 80,274
Real gross domestic product (millions of 2005$) 58,106 57,977 58,847 60,200 61,645 63,124
Gross domestic product deflator (2005=100) 112.9 115.5 119.0 121.8 124.4 127.2
Annual Percentage Change
Total population 1.2 0.8 1.0 1.0 1.0 1.0
Visitor arrivals ¹ 7.7 4.0 8.6 3.5 2.6 2.5
Visitor days ¹ 7.6 4.6 9.4 3.2 2.7 2.6
Visitor expenditures ¹ 10.7 10.7 15.2 5.6 5.2 5.0
Honolulu CPI-U 2.1 3.7 2.8 2.6 2.5 2.5
Personal income 3.7 4.7 4.3 4.8 5.2 5.0
Real personal income ² 1.5 0.9 1.5 2.1 2.6 2.4
Non-agricultural wage & salary jobs -0.8 0.9 1.2 1.8 1.5 1.3
Gross domestic product 2.1 2.1 4.5 4.7 4.7 4.7
Real gross domestic product 1.4 -0.2 1.5 2.3 2.4 2.4
Gross domestic product deflator 0.7 2.3 3.0 2.3 2.2 2.2

1/ Visitors who came to Hawaii by air or by cruise ship.


# # #

SA: Uneven growth slows down state economy

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, August 10, 2012.


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