HONOLULU — In its second quarter 2014 statistics and economic report, the Department of Business, Economic Development and Tourism (DBEDT) projects stable economic growth in 2014 and beyond.
“Though the economic indicators were mixed during the first quarter of 2014, we were happy to see that the value of building permits increased 20.6 percent during the first quarter of this year,” said DBEDT Director Richard C. Lim. “Our labor force and employment figures are reaching record highs while unemployment claims continue to decline.”
“It is encouraging that our unemployment rate during the first quarter was the 6th lowest in the nation.”
DBEDT economists noted that the economic indicators in the state are mixed so far this year. While the labor market condition continues to improve, visitor arrivals decreased 3.2 percent and visitor spending decreased 3.1 percent during the first quarter.
“In a broad sense, our economy is transitioning from tourism to construction,” Lim said, “Nevertheless, our analysis indicates that hotel room capacity, high room rates, and the depreciation of the Japanese yen and Canadian dollar are some of the factors limiting our tourism growth this year. Most of those factors are fluid.”
Currently, there are 73,893 visitor units in the state, 757 units fewer than in 2012, while average daily hotel room rate reached a new record high of $251.13 during the two months of 2014.
Due to the slower than expected growth in personal income and reduced tourism performance, DBEDT has lowered the economic growth rate to 2.4 percent for 2014 from a 2.6 percent projection in February this year. Future growth predictions remain at about 2.2 percent.
During the first three months of 2014, non-agricultural wage and salary jobs increased 8,450 or 1.4 percent from the same period a year ago. All industries experienced increases in jobs except retail trade, manufacturing, and the federal government.
Initial unemployment claims for the first four months of 2014 decreased 1,355 cases or 4.0 percent from the same period in 2013.
The $90.5 million new building permit for the renovation of Ala Moana Shopping Center, the $32.5 million new medical center in Kapolei by Queen’s, and the $54.8 million alteration at Four Seasons Manele Bay Hotel on Lanai were the leading projects permitted during the first quarter of 2014. The result was a 102.3 percent increase for commercial building permit value and 75.0 percent increase in the value of additions and alterations.
The value of residential building permits decreased during the first quarter, but the large construction permits during the quarter included $56.0 million for the Ritz-Carlton Building in Waikiki and $45.2 million for constructing the Symphony building in Kakaako.
DBEDT’s forecast for 2014 visitor arrivals has been lowered to 0.7 percent and visitor spending to 2.3 percent, reflecting the decrease in tourism during the first quarter of the year.
DBEDT expects that visitor market will see improvement in the second half of the year. According to airline schedules, total air seats to Hawaii will increase by 2.5 percent for the year and Japanese arrivals during the Golden Week this year increased 7.8 percent from last year.
DBEDT is keeping the forecast on Honolulu Consumer Price Index (CPI) and statewide unemployment rate unchanged from the previous forecast. The Honolulu inflation rate will rise by 2.1 percent in 2014 and will increase gradually to the 3.0 percent by 2016. The unemployment rate will drop to 4.2 percent for 2014, 4.0 percent in 2015, and below 4.0 percent thereafter. The first quarter unemployment for the state was 4.5 percent.
Using the personal income deflator recently developed by the U.S. Bureau of Economic Analysis, Hawaii real personal income growth is projected to be between 2.1 and 2.3 percent during the next several years.
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://dbedt.hawaii.gov/economic/qser/
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