Outlook for the Economy 4th Quarter 2012
Report from DBEDT November 15, 2012
Based on the most recent development in the national and global economy, the performance of Hawaii's tourism industry, the labor market conditions in the state, and growth of personal income and tax revenues, Hawaii's economy is expected to continue positive growth for the rest of 2012 and into 2013. Overall, the current DBEDT forecast is more optimistic for most of the economic indicators, especially visitor related indicators, compared with the previous forecast
Hawaii's economy depends on the conditions in the U.S. economy and key international economies. According to the Blue Chip Economic Consensus Forecast, the U.S. economy is expected to grow at the 2.0 percent range in 2012 and 2013. Labor market conditions continue to improve with unemployment projected to be 8.1 percent for 2012 and 7.8 percent for 2013. Though the Japanese economy is slightly weaker than expected, the exchange rate is still in favorable to Japanese visitors at about 80 yen per dollar.
Federal government visa policies also play an important role in attracting visitors from foreign markets. Since the visa waiver program started in late 2008, Korean visitors has grown by 3 folds from 38,110 in 2008 to 112,567 in 2011. Visa waiver to Taiwanese visitors started on November 2, 2012 is expected to bring more visitors from Taiwan in the coming year. During the first 9 months of 2012, airseats increased 7.4 percent and the last quarter is expected to grow by 12.7 percent, ending the year by 8.7 percent increase. Latest data from Official Airline Guide (OAG) indicates that airseats to Hawaii is scheduled to grow by 4.6 percent during the first half of 2013.
The construction industry showed signs of recovery in the third quarter of 2012 with 1.4 percent increase in construction jobs during the quarter. Year-to-date through September, the value of private building permits increased by 39.1 percent and the State Capital Improvement Project spending increased 32.9 percent as compared with the same period in 2011.
Overall, Hawaii's economy measured by real GDP is projected to show a 1.6 percent increase in 2012, 0.1 of a percentage point higher than the growth rate forecasted last quarter. Real GDP growth is currently expected to increase to 2.4 percent in 2013, 0.1 of a percentage point higher than the growth rate forecasted last quarter.
Visitor arrivals are expected to increase 9.4 percent in 2012, 0.8 of a percentage point higher than the previous forecast. The forecast for visitor days in 2012 remain unchanged from the previous forecast. The forecast for visitor expenditure in 2012 is revised upward to 18.8 percent, from 15.2 percent growth projected in the previous forecast. For 2013, the growth rates of visitor arrivals, visitor days, and visitor expenditures are now expected to be 3.9 percent, 3.7 percent, and 5.2 percent, respectively.
The projection for non-agricultural wage and salary job growth rate in 2012 is 1.5 percent, 0.3 of a percentage point above the growth rate of non-agricultural wage and salary job estimated in the previous forecast. In 2013, jobs are projected to increase 2.0 percent, 0.2 of a percentage point higher than the growth rate of non-agricultural wage and salary job estimated in the previous forecast.
The Honolulu Consumer Price Index (CPI), which increased 3.7 percent in 2011, is expected to increase 2.5 percent in 2012, 0.3 of a percentage point below the previous forecast. In 2013, the CPI is projected to increase 2.4 percent, 0.2 of a percentage point below the previous forecast.
Personal income in current dollars is now expected to increase 4.3 percent in 2012, same as the growth rate in the previous forecast. The real personal income is currently projected to grow 1.8 percent in 2012, 0.3 of a percentage point above the previous forecast. In 2013, current-dollar personal income and real personal income are expected to increase 4.8 percent and 2.3 percent, respectively.
Beyond 2013 the economy will be on the expansion path with job growth expected to increase 1.5 percent in 2014 and 2015. Visitor arrivals are expected to increase 2.7 percent in 2014 and 2.6 percent in 2015. Visitor expenditures are expected to increase 5.3 percent in 2014 and 5.1 percent in 2015. Real personal income is projected to increase 2.8 percent in 2014 and 2.6 percent in 2015. Hawaii's real GDP growth is expected to reach 2.5 percent in 2014 and 2015.
ACTUAL AND FORECAST OF KEY ECONOMIC INDICATORS FOR HAWAII: 2010 TO 2015
|
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
|
7,982
|
8,291
|
8,518
|
8,737
|
|
Visitor days (thousands) ¹
|
65,465
|
68,495
|
74,921
|
77,705
|
79,855
|
81,942
|
|
Visitor expenditures (million dollars) ¹
|
11,066
|
12,255
|
14,562
|
15,317
|
16,122
|
16,942
|
|
Honolulu CPI-U (1982-84=100)
|
234.9
|
243.6
|
249.7
|
255.7
|
261.6
|
267.6
|
|
Personal income (million dollars)
|
55,832
|
59,014
|
61,552
|
64,506
|
67,860
|
71,253
|
|
Real personal income (millions of 2000$) ²
|
41,909
|
42,706
|
43,456
|
44,475
|
45,735
|
46,943
|
|
Non-agricultural wage & salary jobs (thousands)
|
586.9
|
592.1
|
601.0
|
613.0
|
622.2
|
631.5
|
|
Gross domestic product (million dollars)
|
65,599
|
66,991
|
70,105
|
73,438
|
76,930
|
80,588
|
|
Real gross domestic product (millions of 2005$)
|
58,106
|
57,977
|
58,905
|
60,318
|
61,826
|
63,372
|
|
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
|
9.4
|
3.9
|
2.7
|
2.6
|
|
|
Visitor days ¹
|
7.6
|
4.6
|
9.4
|
3.7
|
2.8
|
2.6
|
|
|
Visitor expenditures ¹
|
10.7
|
10.7
|
18.8
|
5.2
|
5.3
|
5.1
|
|
|
Honolulu CPI-U
|
2.1
|
3.7
|
2.5
|
2.4
|
2.3
|
2.3
|
|
|
Personal income
|
3.0
|
5.7
|
4.3
|
4.8
|
5.2
|
5.0
|
|
|
Real personal income ²
|
0.9
|
1.9
|
1.8
|
2.3
|
2.8
|
2.6
|
|
|
Non-agricultural wage & salary jobs
|
-0.8
|
0.9
|
1.5
|
2.0
|
1.5
|
1.5
|
|
|
Gross domestic product
|
2.1
|
2.1
|
4.6
|
4.8
|
4.8
|
4.8
|
|
|
Real gross domestic product
|
1.4
|
-0.2
|
1.6
|
2.4
|
2.5
|
2.5
|
|
|
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.
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 8, 2012
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Quarterly Statistical & Economic Report
The full report contains more than 100 pages of narrative and tables. The Executive Summary contains the narratives and selected data tables.
4th Quarter 2012
Part I. Economic Summary & Outlook
· State of the Economy
· Outlook for the Economy
· County Economic Conditions
Part II. Economic Review and Data
· Labor Force & Jobs
· Income & Prices
· Tax Revenues
· Tourism
· Construction
· Other Indicators
· Selected County Tables
Part III. Terms & Definitions
· Download the Full Report
· Download the Executive Summary
· QSER Archive