Hawaii Sees Continued Economic Recovery

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Photo by Malia Zimmerman

HONOLULU — According to its latest quarterly economic report, the Department of Business, Economic Development & Tourism (DBEDT) continues to expect steady improvement in the State’s economy, particularly in tourism.

The improvement in Hawai‘i’s leading economic sector and the recovering national economy are expected to help sustain a gradual recovery of Hawai‘i’s economy over the next several years.

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“We are confident that we will continue to see improvement in our economy over the next few years,” said DBEDT Director Theodore E. Liu. “Jobs continue to be a lagging indicator and our efforts are focused on trying to create new jobs and improve the overall job market.”

Visitor arrivals, spending and even length of stay have shown marked improvement over the first three months of 2010, particularly among international travelers.  Overall, the visitor count rose 4.5 percent in the first quarter from the year before, led by a 12.7 percent surge in international visitors.  The average daily visitor census increased by 4.8 percent and expenditures by 5.0 percent for the same period.

Expectations for the U.S. economy continue to improve.  The Blue-Chip consensus forecast for the U.S. now expects a 3.2 percent increase in Gross Domestic Product (GDP) for 2010, up slightly from 3.0 percent projected three months ago.  Forecasts of key international economies have also improved.

DBEDT has raised its forecast for total visitor arrivals in 2010 to a 2.6 percent gain, up from 2.0 percent forecast last quarter.  Visitor expenditures are now expected to increase 4.9 percent in 2010, up from 2.3 percent forecast last quarter.  Total visitor days are projected to increase 2.6 percent in 2010, up slightly from 2.1 percent in the previous forecast.

The updated forecast for 2010 real gross state domestic product is for a 1.1 percent increase, up a bit from the 0.9 percent forecast last quarter.  The current forecast of real personal income growth is now slightly positive (0.2 percent) compared to zero in the previous forecast.  The expected growth in 2010 personal income on a current-dollar basis (which includes the effects of inflation) is now 1.9 percent.

The forecast for inflation as reflected by the Honolulu Consumer Price Index (CPI) remains at 1.7 percent in 2010.

Because jobs lag behind economic recovery, total wage and salary jobs in Hawai‘i are still expected to decline for the year as a whole, by 0.9 percent.  For the first three months of 2010, the total wage and salary job count was down 2.2 percent from the same 2009 period.  While job growth should gradually turn positive as the year progresses, it will not likely be enough to avoid making this the third consecutive year of decline in Hawai‘i’s total job count.

Assuming that improvement in national and international economic conditions proceeds, DBEDT says it expects recovery of the state’s economy to continue in 2011 and beyond along the modest growth path forecast last quarter.  The visitor arrival count is projected to increase by 4.1 percent in 2011, with visitor expenditures up 7.3 percent (somewhat below the previous forecast due to the higher base now expected for 2010 expenditures).  The increases in real personal income and real GDP continued to be forecast at 0.8 percent and 1.4 percent, respectively, in 2011.  The increase in the state’s job count is still expected to remain modest in 2011 at 0.8 percent for 2011.  The gradual pace of recovery will likely continue into 2012 and 2013, barring unforeseen events.

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:

https://www.hawaii.gov/dbedt/info/economic/data_reports/qser.

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  1. The State Department of Labor and Industrial Relations could receive 100% federal funding for its traditional Extended Benefits (EB) unemployment insurance program. However, these federal funds are not coming to Hawaii unless the state government makes proper application for a “trigger”. The EB program is not the same as the federal Emergency Unemployment Compensation program with its several Tiers. See https://www.ows.doleta.gov/unemploy/claims_arch.asp

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