HONOLULU—In its third quarter economic report, the Department of Business, Economic Development & Tourism (DBEDT) is slightly more optimistic about Hawai‘i’s economic forecast for 2010 and 2011. DBEDT expects that international economic conditions and increasing tourism arrivals and expenditures in Hawai‘i will help sustain a gradual recovery in Hawai‘i’s economy.
“We are pleased by the strong performance of our tourism industry,” said DBEDT Director Theodore E. Liu. “We have seen job gains in the tourism-related fields during the first half of the year, and this will have a ripple effect that will help minimize job losses in other sectors during the second half of the year.”
Recent forecasts for the U.S. economy are showing slightly lower growth in 2010 than previously projected. The consensus forecast for the U.S. now expects a 2.9 percent increase in Real Gross Domestic Product (GDP) for 2010. That is down from a 3.2 percent projection last quarter. However, forecasts of key international economies are slightly better.
DBEDT now expects total visitor arrivals to increase 4.6 percent in 2010, up 2.0 percentage points from the previous forecast. Visitor expenditures are now expected to increase 8.2 percent in 2010. This is 3.3 percentage points higher than DBEDT’s previous forecast. Total visitor days are now projected to increase 4.1 percent in 2010, compared to the 2.5 percent increase projected in the previous forecast.
The updated forecast for 2010 real gross state domestic product is for a 1.2 percent growth, marginally higher than the 1.1 percent forecast last quarter. The current forecast of current dollar personal income growth in 2010 is 2.5 percent, a 0.6 percentage point increase from the previous forecast. However, due to the revised 2010 inflation rate, which is now 0.5 percent higher than previously forecasted, the real personal income in 2010 is now expected to increase 0.3 percent, only slightly higher than the 0.2 percent growth in the previous forecast.
Total wage and salary jobs in Hawai‘i are now expected to decline 0.6 percent in 2010, better than the 0.9 percent decrease previously projected.
The Honolulu Consumer Price Index (CPI), a proxy for inflation, is expected to rise 2.2 percent in 2010. This upward revision in inflation rate is the result of the most recent release of Honolulu CPI by the U.S. Bureau of Labor Statistics (BLS). BLS data shows that Honolulu CPI increased 2.5 percent during the first half of 2010.
Assuming continued improvement in national and international economic conditions, a gradual pace of recovery will likely continue next year and into 2012 and 2013, barring unforeseen events.
Visitor count is expected to recover to the 2007 peak level of 7.6 million by 2013, but the wage and salary job count will take longer time to recover to its peak year of 2007 with 631,000 jobs.
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.