REPORT: State Forecasts Stronger Economic Growth Across All Counties
In its first quarter 2011 economic report, the Department of Business, Economic Development & Tourism (DBEDT) forecasts a strong recovery in Hawaii’s economy in 2011 and economic expansion in 2012.
Overall economic conditions were mostly positive across counties in the fourth quarter of 2010. The unemployment rate decreased in all counties. Total visitor arrivals by air and visitor days both increased in all counties. Except for a small decrease in Hawaii County, total wage and salary jobs increased in all other counties, (Tables 2 through 5). The value of private building permits increased in Hawaii and Maui County but decreased in Honolulu and Kauai County.
“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.”
In the fourth quarter of 2010, the value of total private building permits increased in the counties of Hawaii and Maui but decreased in Honolulu and Kauai compared with the same quarter of 2009. In dollar terms, Hawaii County increased the most at $16.5 million or 24.3 percent, followed by Maui County at $1.6 million or 3.2 percent; private building permits in Honolulu and Kauai decreased $9.3 million or 3.2 percent and $0.8 million or 4.5 percent, respectively. For the whole year of 2010, private building permits in Honolulu and Hawaii County increased 8.8 percent and 16.5 percent, respectively, but decreased 13.3 percent and 68.8 percent in Maui and Kauai, respectively.
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.
Visitor arrivals by air and visitor days both increased in all counties in the fourth quarter of 2010. Compared to the same quarter of 2009, visitor arrivals by air in Honolulu, Maui, Hawaii, and Kauai increased 11.3 percent, 16.5 percent, 10.8 percent and 7.9 percent, respectively, in the fourth quarter of 2010. For whole year of 2010, visitor arrivals by air in Honolulu, Maui, Hawaii, and Kauai increased 7.7 percent, 10.4 percent, 6.1 percent, and 3.8 percent, respectively, over the previous year.
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.
For more details, go to DBEDT’s Quarterly Statistical and Economic Report which 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.