HONOLULU — In its first quarter 2011 economic report, the Department of Business, Economic Development & Tourism (DBEDT) forecasts a strong recovery in Hawai‘i’s economy in 2011 and economic expansion in 2012. DBEDT expects that continued growth in tourism and the recovery in construction in Hawai‘i will help the economy to head on to the expansion path.
“We are encouraged by the continued improvement in our economy, especially with respect to our construction industry,” said DBEDT Director Richard C. Lim. “We note that the construction industry has started to add more jobs since October 2010 and that the value of commercial and industrial building permits in 2010 increased 32.5 percent.”
Recent forecasts for the U.S. economy are showing higher growth in 2011 than previously projected. The consensus forecast for the U.S. projects a 3.2 percent increase in Real Gross Domestic Product (GDP) for 2011. That is up from a 2.5 percent projection last quarter. Similarly, forecasts of key international economies are also better. For the local economy, forecasts for most of the economic indicators are more optimistic compared to the previous forecast.
DBEDT expects total visitor arrivals to increase 4.0 percent and visitor days to increase 4.1 percent in 2011, both about the same as the previous forecast. However, visitor expenditures are now expected to increase 9.2 percent in 2011. This is a 0.8 percentage point higher than DBEDT’s previous forecast. This projected increase is primarily based on the growth of the high-spending markets such as China and Korea and the continued recovery in hotel room rates.
The updated forecast for 2011 real gross state domestic product is for a 2.0 percent growth, slightly higher than the 1.8 percent forecast last quarter. The current forecast on personal income is the same as the previous forecast at 3.2 percent in nominal terms and 1.0 percent in real growth for 2011. Total wage and salary jobs in Hawai‘i are now expected to increase 1.3 percent in 2011, higher than the 1.1 percent increase previously projected.
The Honolulu Consumer Price Index (CPI), a proxy for inflation, is expected to rise 2.2 percent in 2011, the same as previous projections.
Assuming continued improvement in national and international economic conditions, Hawaii will see 7.6 million visitors again in 2012 and the economy will move from recovery to expansion.
The state’s visitor count is expected to exceed the 2007 peak level of 7.6 million by 2013, but the wage and salary job count may take longer to recover to its peak of 631,000 jobs in 2007.
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